Stablecoin Adoption Threatens $500 Billion in Bank Deposits by 2028

U.S. banks could lose over $500 billion in deposits to dollar-backed stablecoins by 2028, according to Standard Chartered research. Accelerated adoption may disrupt traditional banking funding models as regulatory clarity improves and digital tokens gain traction in payments, settlements, and on-chain finance.

Regional banks face heightened exposure due to reliance on retail deposits and net interest income. Yield-bearing stablecoins could pressure profitability at smaller lenders faster than diversified banking groups with broader revenue streams.

Stablecoin supply has surged 40% year-over-year, surpassing $300 billion. Clearer crypto regulations may legitimize their use in commerce, cross-border settlements, and blockchain-based financial infrastructure.

The payment shift toward stablecoins erodes banks' net interest margins—a key profitability metric measuring the difference between loan interest earned and deposit interest paid.