Stablecoins Pose Significant Risk to US Bank Deposits, Standard Chartered Warns
According to a recent report from Standard Chartered, stablecoins pose a substantial threat to bank deposits, both globally and in the United States. The delay of the US CLARITY Act, a bill aimed at banning interest on stablecoin holdings, has highlighted the risks associated with stablecoins. Geoff Kendrick, global head of digital asset research at Standard Chartered, stated that the delay serves as a “reminder that stablecoins pose a risk to banks.” The report estimates that US bank deposits could fall by a third of the stablecoin market cap, which currently stands at $301.4 billion for US dollar-pegged stablecoins, as measured by CoinGecko.
The findings from Standard Chartered add to the ongoing debate surrounding the CLARITY Act, with companies like Coinbase withdrawing their support and Circle CEO Jeremy Allaire dismissing concerns about stablecoin-driven bank runs as “completely absurd.” The report’s conclusions are based on an analysis of net interest margin income (NIM), a key profitability metric that measures the difference between interest earned and interest paid divided by average interest-bearing assets. Kendrick noted that NIM revenue as a percentage of total bank revenue is the most accurate measure of this risk, as deposits drive NIM and are at risk of leaving banks due to stablecoin adoption.
Regional US Banks Most Exposed to Stablecoin Risks
Regional US banks have been identified as the most exposed to the risks associated with stablecoins, with diversified banks and investment banks being the least exposed. Kendrick named Huntington Bancshares, M&T Bank, Truist Financial, and CFG Bank as the most exposed banks. The amount of US bank deposits at risk from stablecoin adoption depends on various factors, including the location of the issuer’s deposits, domestic and foreign demand, and wholesale and retail demand. 
If stablecoin issuers hold a large portion of their deposits in the banking system where the stablecoins are issued, the pressure for bank runs should be reduced, Kendrick wrote. However, Tether and Circle, the operators of the world’s two largest stablecoins, USDt (USDT) and USDC (USDC), only hold 0.02% and 14.5% of their reserves in bank deposits, respectively. This means that very little re-depositing is taking place, increasing the risk of bank runs. Regarding domestic demand versus foreign demand, Kendrick concluded that domestic demand depletes local bank deposits, while foreign demand does not.
Bank of America CEO Highlights $6 Trillion in Bank Deposits at Risk
Bank of America CEO Brian Moynihan recently highlighted that $6 trillion in bank deposits are at risk due to stablecoin yields. Kendrick estimated that around two-thirds of stablecoin demand currently comes from emerging markets, with one-third coming from developed markets. Based on a projected market capitalization of $2 trillion, about $500 billion in deposits could be withdrawn from banks in developed markets by the end of 2028, while about $1 trillion could be withdrawn from banks in emerging markets. Standard Chartered still expects the CLARITY Act to be passed by the end of the first quarter of 2026, with Kendrick noting that bank run risks are not just limited to stablecoins but also arise from the “inevitable” expansion of real-world assets.
For more information on the risks associated with stablecoins and their potential impact on US bank deposits, read the full report from Standard Chartered. The report provides a detailed analysis of the stablecoin market and its potential effects on the banking system. Source
