Standard Chartered: Stablecoin growth poses real threat to bank deposits

Stablecoins could become a substantial threat to bank deposits, according to an analysis by global investment bank Standard Chartered (SC). Cointelegraph reports that Geoff Kendrick, SC's head of digital assets research, noted that if the U.S. CLARITY Act on crypto market structure is passed, U.S. bank deposits could decrease by an amount equal to roughly one-third of the market capitalization of dollar-pegged stablecoins. He pointed out that regional banks would be the most significantly affected. Kendrick explained that the effect of funds flowing back into the system as deposits would be limited, as Tether and Circle hold only 0.02% and 14.5% of their reserves in bank deposits, respectively. He added that if the stablecoin market cap expands to $2 trillion by 2028, up to $500 billion in deposits could exit banks in developed nations.