Experts Challenge Standard Chartered’s $1 Trillion Stablecoin Warning for Emerging Markets

Standard Chartered's alarming prediction of a $1 trillion outflow from emerging market banks due to stablecoin adoption faces scrutiny. The report, led by Geoff Kendrick and Madhur Jha, identifies Egypt, Pakistan, Bangladesh, and Sri Lanka as particularly vulnerable. While representing just 2% of deposits in these economies, the potential shift could reshape financial systems as stablecoins offer dollarized accounts without traditional banks.

Dominic Schwenter of Lisk counters that the analysis overlooks a critical trend: the surge in local-currency stablecoins like Nigeria's cNGN and Indonesia's IDRX. "The real transformation isn't dollar substitution—it's the emergence of sovereign digital currencies," he observes. This dual dynamic—global dollar stablecoins and localized alternatives—creates complex interdependencies rather than simple capital flight.