Global banking giant Standard Chartered says a significant portion of traditional bank deposits could migrate into stablecoins over the next few years, potentially reshaping the global financial landscape.
? @StanChart has warned that rising #stablecoin adoption could draw $500B from US bank deposits by the end of 2028.
The figure represents one-third of the $2T stablecoin market capitalization that the bank’s analysts project by the end of the decade.
To evaluate which US banks… pic.twitter.com/VOOMOuwmgj
— Mpost Media Group (@mpost_io) January 28, 2026
In a report released on the 28th, Geoff Kendrick, Head of Digital Assets Research at Standard Chartered, estimated that around $500 billion in bank deposits may move into stablecoins by 2028. While this projection is lower than his earlier $1 trillion estimate shared in October, it still signals a major structural shift for the banking sector.
US Stablecoin Legislation Could Accelerate Capital Flows
The forecast comes as the United States debates comprehensive digital asset legislation, including provisions that may allow stablecoin holders to earn yield.
If yield-bearing stablecoins become legally recognized, Kendrick believes this could accelerate capital migration away from traditional banks and toward digital assets, increasing investor interest across the crypto ecosystem.
Although progress on the bill has stalled, Kendrick expects it could be signed into law by the end of Q1, setting the stage for rapid adoption.
He warned that shrinking deposits would directly pressure banks’ net interest margins (NIM), which is a core profit driver derived from the spread between lending and deposit rates.
“Deposits are the foundation of NIM,” Kendrick noted, adding that any sustained outflow would materially affect bank profitability.
Regional Banks Face Greater Risk Than Wall Street Giants
Standard Chartered’s analysis shows that US regional banks are far more exposed to potential deposit flight than diversified global institutions.
While investment banks such as Goldman Sachs generate less than 20% of revenue from net interest margins, many regional lenders depend on NIM for the majority of their earnings.
For example, institutions like Huntington Bancshares derive over 60% of revenue from NIM, making them structurally vulnerable if deposits migrate to stablecoins.
Deposit Losses May Be Partially Offset
However, Kendrick emphasized that stablecoin adoption does not automatically translate into a full loss for banks.
If stablecoin issuers keep most of their reserves within the banking system, the actual reduction in bank deposits could be limited. In such cases, customer funds may simply shift form rather than fully exit the financial system.
This dynamic could partially offset the impact of retail deposit outflows, preventing a sharp contraction in overall bank liquidity.
Regulation Will Shape the Next Phase of Digital Finance
Looking ahead, Kendrick said regulatory clarity—and how banks adapt to it—will be decisive for the broader financial market.
Whether stablecoins evolve into a complementary layer of finance or emerge as a disruptive force depends largely on upcoming policy decisions and institutional responses.
As different cryptocurrencies continue to integrate with traditional finance, the race is on for banks to rethink their strategies in a world where programmable money may soon compete directly with deposits.
