Emerging Market Trust Erosion Fuels $1T Shift to Stablecoins by 2028

Standard Chartered Bank has projected that over $1 trillion in deposits from emerging market banks could shift to stablecoins by 2028, driven by growing demand for dollar-pegged digital assets in economies grappling with weak currencies and high inflation Standard Chartered estimates $1 trillion could exit emerging market bank deposits for stablecoins by late 2028^[1]. The bank's analysis, conducted by global head of digital assets research Geoffrey Kendrick and economist Madhur Jha, highlights a structural migration of savings from traditional banking systems to blockchain-based alternatives, with stablecoins acting as a "USD-based bank account" for millions of users Standard Chartered Sees $1 Trillion Shift to Stablecoins by 2028, Led by Emerging Markets^[2]. This trend, the report argues, reflects a broader post-crisis reallocation of financial services to non-bank platforms, particularly in regions where trust in local institutions is eroding Stablecoin News: Emerging Market Banks Could Suffer - CoinDesk^[3].

The forecast is underpinned by current adoption patterns in countries like Egypt, Pakistan, Bangladesh, and Sri Lanka, where stablecoins are increasingly used for capital preservation amid hyperinflation and currency devaluation Standard Chartered Sees $1 Trillion Shift to Stablecoins by 2028^[4]. Despite the U.S. GENIUS Act's prohibition on yield generation for compliant stablecoin issuers, users prioritize liquidity and stability over returns, the report notes. Standard Chartered estimates that stablecoin savings in emerging markets could expand from approximately $173 billion today to $1.22 trillion by 2028, with small retail accounts driving the majority of growth Stablecoins could see $1 trillion in inflows from emerging markets...^[5]. This shift would imply a significant portion of traditional bank deposits being replaced by decentralized, 24/7 accessible digital alternatives.

The global stablecoin market is projected to reach $2 trillion by 2028, with two-thirds of demand originating from emerging economies Standard Chartered estimates $1 trillion could exit emerging market bank deposits for stablecoins by late 2028^[6]. Tether (USDT) and USD Coin (USDC) are already the dominant tokens in this space, with combined market capitalization exceeding $250 billion. The report emphasizes that stablecoins offer cheaper remittances, faster cross-border payments, and a hedge against local currency volatility, making them particularly attractive in regions with underdeveloped financial infrastructure Standard Chartered Sees $1 Trillion Shift to Stablecoins by 2028, Led by Emerging Markets^[7]. Countries such as India, Brazil, and Turkey are also identified as high-risk zones for deposit outflows, given their large populations and existing crypto adoption trends Stablecoin News: Emerging Market Banks Could Suffer - CoinDesk^[8].

For traditional banks, the report outlines both challenges and opportunities. While stablecoins threaten to erode fee income from foreign exchange and payments, institutions could pivot to custody, settlement, and treasury services for stablecoin reserves. The analysts caution that without rapid adaptation, emerging market banks face prolonged competitive pressure from decentralized finance models Standard Chartered Sees $1 Trillion Shift to Stablecoins by 2028^[9]. Meanwhile, regulators in countries like China and Brazil are advancing central bank digital currency (CBDC) pilots and upgrading fast-payment systems to counter the rise of stablecoins Stablecoins could see $1 trillion in inflows from emerging markets...^[10].

The analysis underscores a broader geopolitical and economic shift, with stablecoins redefining access to global financial systems. As blockchain infrastructure expands and stablecoin adoption accelerates, the report warns that the "stablecoin summer" could evolve into a long-term structural transformation of savings and capital flows in the Global South.