Standard Chartered predicts that by 2028, it will have exited $1 trillion of emerging market banks to stablecoins due to inflation and demand of US dollar-pegged crypto assets.
Standard Chartered has also made an interesting prediction to the effect that by 2028, more than 1 trillion dollars might leave the emerging market banks and be transferred to stablecoins.
This marked a monumental change reported by the Global Research department of the multinational bank, with the adoption of global stablecoin doubling, driven by increased demand for US dollar-pegged digital assets, particularly in areas with inflation and currency volatility.
Two-thirds of Stablecoins are already in New Markets
Stablecoins are having an unbelievable momentum in emerging markets, where access to the US dollar has traditionally been challenging in a very stable and convenient way.
These electronic currencies present the alternative of 24/7, fully backed US dollar accounts, which is a serious threat to the local banks.
Standard Chartered pointed out that approximately two-thirds of the existing supply of stablecoins is already in savings wallets in emerging economies.
Stabilizing the Currency and inflating the values.
Those countries with high inflation rates, low reserves, and large remittance flows are most vulnerable to deposit flight to stablecoins.
A good example is Venezuela, where hyperinflation and the downfall of the local currency have become so dire that people now use stablecoins to make their daily transactions and save.
The growing use of stablecoins as an inflation hedge is also emerging in Argentina, Brazil, Egypt, Pakistan, Bangladesh, and Sri Lanka.
Standard Chartered estimates that savings by stablecoins in emerging markets would increase by over 173 billion to 1.22 trillion by 2028. This indicates that in a period of three years, there may be approximately one trillion dollars leaving traditional banks for stablecoins.
Their attraction is further enhanced by the U.S. GENIUS Act, the bill requiring that the stablecoins be fully supported with dollars, thus reducing the risk of credit default in comparison to local banks that are volatile.
These dynamics create a critical moment in the world of global finance, indicating the existence of a significant shift in banking systems of emerging markets as digital dollar alternatives redefine the ways of storing and transferring wealth out of conventional banks.
