Financial giant Standard Chartered has issued a critical alert regarding how the growing stablecoin adoption is eroding the deposit base of regional banks in the United States. According to the report released this Tuesday, it is estimated that approximately $500 billion in capital will leave traditional bank accounts to integrate into the digital asset ecosystem by the year 2028.
Under the perspective of Geoff Kendrick, head of digital assets research, the vulnerability of domestic lenders lies in their heavy reliance on net interest margin (NIM). This metric, which defines banking profitability, is directly threatened by the flight of retail deposits, which act as the primary fuel for credit operations in local and regional communities across the nation.
Furthermore, the delay in market structure legislation in Washington has exacerbated the risk for medium-sized financial institutions. Although regulatory clarity is anticipated to be approved by late Q1 2026, the current lack of oversight allows digital dollars to cannibalize the savings of customers who are increasingly seeking higher operational agility and significantly lower transaction costs.
Financial disintermediation and the flight of liquidity to digital rails
Unlike what a healthy integration would suggest, major issuers of dollar-linked assets are not reinvesting their reserves back into the commercial banking system. The analysis details that leading firms like Tether and Circle keep minimal percentages of their reserves in bank deposits, preferring instruments such as Treasury bills instead. Therefore, the liquidity leaving regional banks rarely returns to their institutional balances.
On the other hand, the expansion of stablecoin adoption in developed markets is transforming these assets into tools for direct daily settlement. With the entry of new competitors like Tether’s USAT token, issued through Anchorage Digital Bank, the traditional banking sector faces unprecedented competition for control over cross-border capital flows and high-speed domestic payments.
Will local banks be able to compete against the yield and efficiency of the Blockchain?
However, the pressure on regional banks could force a deep restructuring of financial services in developed economies over the next three years. The report projects that one-third of the total stablecoin market, estimated at $2 trillion, will come from traditional bank deposits, suggesting a structural shift in how the public perceives and stores their most liquid capital.
Ultimately, the convergence between technology and finance is creating a new paradigm where money moves with the same speed as information. While authorities debate restrictions on paying interest on digital assets, stablecoin adoption continues to advance, consolidating itself as the preferred payment infrastructure for a new generation of users and institutional investors around the world.
