According to a research report by Standard Chartered, nearly $500 billion will shift from banks’ deposits to stablecoins globally within the next few years. This transition will be especially pronounced in countries with unstable or high-risk financial systems, such as Egypt, Pakistan, Bangladesh, Sri Lanka, Turkey, India, and Kenya. The report highlights that this trend will significantly impact the traditional banking sector. Bank deposits have historically served as a safe investment and a payment hub. However, the growing popularity of stablecoins and their use in online transactions and cross-border financial exchanges are undermining the role of conventional banking systems. As a result, key revenue sources for banks—particularly in regions where banks rely heavily on low-interest deposits—may be adversely affected. Regional banks like Huntington Bancshares and M&T Bank, which derive a large portion of their income from net interest margins, could face challenges due to this shift. These banks may find it harder to secure low-cost deposits, increasing their financial risks and raising lending costs. While the immediate impact may not be evident during periods of high interest rates, a reduction in interest rate spreads could trigger banking crises. The increasing prominence of stablecoins and their effect on traditional banking present a new challenge for the financial sector, requiring banks to adapt their models to align with modern financial technologies.
Source: binance
