Standard Chartered Flags Stablecoins as Major Risk for U.S. Regional Banks
On Tuesday, Standard Chartered cautioned that if stablecoins grow to a market value of 2 trillions de dollars, U.S. regional banks could face a potential 500 milliards de dollars outflow in deposits by 2028.
The bank’s research highlights that shrinking net interest margins present a significant threat to financial institutions that heavily depend on deposits for income. Geoff Kendrick, Head of Digital Asset Research at Standard Chartered, projects that roughly one-third of stablecoin expansion could come directly from bank accounts in developed nations. CoinGecko reports that the current supply of dollar-backed stablecoins stands at around 301 milliards de dollars.
This forecast assumes that the current legislative framework on stablecoins, now under consideration in Congress, will be enacted. However, JPMorgan analysts have disputed Standard Chartered’s 2 trillions de dollars prediction, instead estimating that stablecoins may only reach a market cap of 500–600 milliards de dollars by 2028.
Regional banks are particularly exposed due to their reliance on deposit-based revenue. Compared with large national or investment banks, U.S. regional banks earn a larger share of their total income from net interest margins—the difference between interest earned on loans and interest paid to depositors.
The report specifically points to Huntington Bancshares, M&T Bank, Truist Financial, and CFG Bank as institutions that could face substantial impact. Unlike major money center banks, which generate significant fees from investment banking and asset management, these regional banks have less diversified revenue streams, making them more vulnerable to shifts in deposit flows.
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On Tuesday, Standard Chartered cautioned that if stablecoins grow to a market value of 2 trillions de dollars, U.S. regional banks could face a potential 500 milliards de dollars outflow in deposits by 2028.
The bank’s research highlights that shrinking net interest margins present a significant threat to financial institutions that heavily depend on deposits for income. Geoff Kendrick, Head of Digital Asset Research at Standard Chartered, projects that roughly one-third of stablecoin expansion could come directly from bank accounts in developed nations. CoinGecko reports that the current supply of dollar-backed stablecoins stands at around 301 milliards de dollars.
This forecast assumes that the current legislative framework on stablecoins, now under consideration in Congress, will be enacted. However, JPMorgan analysts have disputed Standard Chartered’s 2 trillions de dollars prediction, instead estimating that stablecoins may only reach a market cap of 500–600 milliards de dollars by 2028.
Regional banks are particularly exposed due to their reliance on deposit-based revenue. Compared with large national or investment banks, U.S. regional banks earn a larger share of their total income from net interest margins—the difference between interest earned on loans and interest paid to depositors.
The report specifically points to Huntington Bancshares, M&T Bank, Truist Financial, and CFG Bank as institutions that could face substantial impact. Unlike major money center banks, which generate significant fees from investment banking and asset management, these regional banks have less diversified revenue streams, making them more vulnerable to shifts in deposit flows.
#ClawdBotSaysNoToken #StrategyBTCPurchase #TSLALinkedPerpsOnBinance #SouthKoreaSeizedBTCLoss #ClawdbotTakesSiliconValley