US banks may lose $500 billion to stablecoins by 2028, Standard Chartered warns

By Hannah Lang

Jan 27 (Reuters) - U.S. dollar-backed crypto tokens known arsenic stablecoins could propulsion astir $500 cardinal successful deposits retired of U.S. banks by the extremity of 2028, ​Standard Chartered estimated connected Tuesday - caller investigation that could intensify a combat betwixt banks ‌and crypto companies implicit authorities to acceptable rules for the integer plus sector.

Regional U.S. banks would beryllium astir exposed to ‌a nonaccomplishment successful deposits owed to stablecoins, said Geoff Kendrick, planetary caput of integer assets probe astatine Standard Chartered.

The investigation was based connected lenders' nett involvement borderline income - the quality betwixt what a slope earns connected loans and what it pays retired connected deposits.

"U.S. banks ... look a menace arsenic outgo ⁠networks and different halfway banking activities ‌shift to stablecoins," Kendrick said successful the probe note.

U.S. President Donald Trump past twelvemonth signed into instrumentality a measure creating a national regulatory model for ‍stablecoins, which is wide expected to pb to greater wide usage of the dollar-pegged tokens. Proponents accidental stablecoins tin beryllium utilized to nonstop and person payments instantly, though they are astir often utilized for commercialized successful ​and retired of different crypto tokens, specified arsenic bitcoin.

That measure prohibited stablecoin issuers from paying ‌interest connected cryptocurrencies, but banks accidental it near unfastened a loophole that would let for 3rd parties - specified arsenic crypto exchanges - to wage output connected tokens, creating caller contention for deposits.

Banking lobbyists person argued that unless Congress closes that loophole, banks volition spot an exodus of deposits, the superior root of backing for astir lenders, perchance threatening fiscal stability.

Crypto companies person pushed back, arguing ⁠that barring them from paying involvement connected stablecoins would ​be anti-competitive.

A proceeding to statement and ballot connected crypto authorities ​in the Senate Banking Committee was postponed earlier this month, successful portion owed to disagreement implicit however lawmakers should code banks' concerns.

Kendrick said the full magnitude ‍of slope deposits astatine ⁠risk from stablecoin adoption hinges connected whether issuers clasp their reserves successful the banking system. If stablecoin issuers support a ample stock of their reserves successful U.S. banks, it ⁠would trim the imaginable deposit flight, helium wrote.

Still, the 2 largest stablecoin issuers - Tether and Circle - clasp astir of ‌their reserves successful U.S. Treasuries, "so precise small re-depositing is happening," Kendrick said.

(Reporting by Hannah ‌Lang successful New York. Editing by Mark Potter)