Standard Chartered Warns Stablecoin Growth Could Trigger $500B Bank-Run
Standard Chartered warned rapid stablecoin adoption could trigger a systemic bank-run, estimating up to $500 billion of bank deposits at risk if growth continues unchecked. Analysts at the bank argue that widespread use of stablecoins as a payment and liquidity tool may prompt large-scale withdrawals from traditional banks, accelerating deposit substitution. The report highlights risks tied to stablecoin issuer concentration, regulatory gaps, and the potential for sudden runs during market stress. Standard Chartered calls for clearer regulation, stronger issuer safeguards, and better bank-stablecoin interoperability controls to reduce contagion risk. The analysis names no single crypto project but frames the issue as a sector-wide vulnerability that could affect banking liquidity, payments, and short-term funding markets.
Bearish
The warning raises meaningful downside risk for crypto markets, particularly stablecoins and pegged assets, because it frames stablecoin growth as a threat to banking liquidity. Traders may react by reducing exposure to stablecoins with weaker backing or higher issuer concentration, increasing demand for high-quality collateral and safe-haven assets (e.g., BTC or top-tier fiat on-ramps). In the short term, the news can cause outflows from lesser-known stablecoins, higher volatility in dollar-pegged tokens, and reduced leverage usage as funding liquidity tightens. In the medium to long term, the story increases pressure for clearer regulation and stronger reserves, which could benefit fully backed, transparent stablecoins while hurting opaque issuers. Historically, similar warnings and regulatory scrutiny (for example, after the Terra collapse and Paxos/Tether probes) have triggered capital reallocations away from risky stablecoins and raised market volatility—outcomes that are bearish for risk-on crypto assets until confidence and regulatory clarity improve.