Standard Chartered Warns: Stablecoins Pose Real Threat to Traditional Bank Deposits

Stablecoins Challenge Traditional Banking

A recent report from Standard Chartered highlights stablecoins as a growing threat to global bank deposit systems. Analyst Geoff Kendrick warns that the expanding market cap of stablecoins could lead to significant deposit outflows from traditional banks.

Regional Banks Face Greatest Risk

The report emphasizes that regional banks in the United States are most vulnerable to this trend, while major investment banks remain relatively resilient. Kendrick estimates a proportional relationship between stablecoin growth and deposit withdrawals.

Low Re-deposit Rates Add Concerns

• Tether’s bank deposit reserves account for just 0.02%
• Circle maintains 14.5% of reserves in bank deposits
• Industry-wide re-deposit rates remain minimal

The delay of the U.S. CLARITY Act underscores regulatory attention to this issue and serves as a wake-up call for the banking sector.