Stablecoins are poised to revolutionize emerging markets with Standard Chartered predicting a significant shift of funds by 2028. The multinational bank forecasts that over $1 trillion could exit emerging market banks, redirecting into stablecoins as demand for US dollar-pegged digital assets escalates.
According to a report released on Monday by Standard Chartered’s Global Research department, the adoption of stablecoins is expected to accelerate markedly. This shift comes as traditional payment networks and core banking activities increasingly migrate to non-bank sectors. As stablecoins gain traction, they present users in emerging markets with a remarkable opportunity to access what is essentially a US dollar-based account.
Stablecoins: A Game Changer for Emerging Markets
Standard Chartered highlights that stablecoin ownership is notably more common in emerging markets than in developed markets. This trend suggests that diversification into stablecoins is more likely in these regions. The bank forecasts a dramatic increase in stablecoin usage for savings in emerging markets, rising from $173 billion to $1.22 trillion by 2028.
This remarkable growth implies that approximately $1 trillion could exit traditional banks in emerging markets within the next three years. The bank notes that stablecoins offer digital, round-the-clock access to USD accounts, posing lower credit risks than local bank deposits, especially given the United States’ GENIUS Act, which requires stablecoins to be fully backed by dollars.
Current Landscape and Future Disruptions
Standard Chartered estimates that about two-thirds of the current stablecoin supply is already held in savings wallets across emerging markets. The bank warns that countries with high inflation, weak reserves, and significant remittance inflows face an increased risk of deposit flight into stablecoins.
An illustrative example of this shift is Venezuela. Amid hyperinflation and the bolivar’s collapse, Venezuelans have increasingly turned to stablecoins as both a medium of exchange and a store of value. Merchants frequently price goods in USDt (USDT), often referred to locally as “Binance dollars,” reflecting how stablecoins have supplanted the bolivar in daily commerce.
Chainalysis’ 2024 crypto adoption report ranked Venezuela 13th, showcasing a 110% increase in crypto usage throughout the year. From small family stores to large retail chains, many businesses now accept crypto payments through platforms like Binance and Airtm. In 2023, cryptocurrencies accounted for 9% of the $5.4 billion in remittances sent to Venezuela.
Regional Shifts in Financial Behavior
Beyond Venezuela, countries such as Argentina and Brazil are increasingly using stablecoins like USDC and USDT to combat inflation. Businesses in these regions are beginning to accept stablecoins as a form of payment. According to Fireblocks, stablecoins account for 60% of crypto transactions in both Brazil and Argentina.
As stablecoins continue to gain prominence, their impact on the financial systems of emerging markets will be profound. The adoption of these digital assets provides a hedge against local currency volatility, offering a stable alternative for savings and transactions.
