EM Deposits to Shift $1T into USD Stablecoins through 2028
Standard Chartered warns that emerging-market bank deposits could flow into dollar-backed stablecoins, rising from $173 billion today to $1.22 trillion by 2028. Drivers include US regulatory clarity, high inflation and weak local currencies, making stablecoins like USDT and USDC attractive as USD-denominated savings vehicles. This outflow, under 2% of total deposits across 16 high-risk countries (Egypt, Pakistan, Bangladesh, Sri Lanka, Kenya, Morocco, Turkey, India, China, Brazil and South Africa), may reshape bank lending and force higher deposit rates. Traders should monitor stablecoin flows and EM banking metrics for market signals.
Bullish
The projection of a $1 trillion shift into stablecoins by 2028 signals growing adoption and demand for USD-backed tokens like USDT and USDC. In the short term, increased inflows may boost trading volumes and on-chain liquidity for these stablecoins, supporting tighter spreads and higher turnover. Over the long term, persistent outflows from EM bank deposits could reinforce stablecoins’ role as a capital preservation tool, driving broader market confidence and institutional integration. This trend is likely to underpin price stability and incremental growth in the stablecoin market, generating a bullish outlook.