Stablecoins pose an actual danger to financial institution deposits each globally and in the US, in line with a brand new report by Commonplace Chartered analysts.
The delay of the US CLARITY Act — a invoice proposing to ban curiosity on stablecoin holdings — is a “reminder that stablecoins pose a danger to banks,” Geoff Kendrick, world head of digital belongings analysis at Commonplace Chartered, stated in a report on Tuesday seen by Cointelegraph.
“We estimate that US financial institution deposits will lower by one-third of stablecoin market cap,” the analyst stated, referring to a $301.4 billion market of US dollar-pegged stablecoins, as measured by CoinGecko.
Commonplace Chartered’s findings add to the CLARITY Act debate amid firms like Coinbase withdrawing assist, and Circle CEO Jeremy Allaire dismissing fears of stablecoin-driven financial institution runs as “completely absurd.”
Regional US banks most uncovered, funding banks least
Within the report, Kendrick highlighted internet curiosity margin (NIM) revenue — a key profitability metric that measures the distinction between curiosity earned and curiosity paid, divided by common interest-earning belongings.
“NIM revenue as a proportion of complete financial institution income is probably the most correct measure of this danger as a result of deposits drive NIM, they usually danger leaving banks because of stablecoin adoption,” Kendrick stated.
“We discover that regional US banks are extra uncovered on this measure than diversified banks and funding banks, that are least uncovered,” he added, naming Huntington Bancshares, M&T Financial institution, Truist Monetary and CFG Financial institution as probably the most uncovered.
The quantity of US financial institution deposits in danger from stablecoin adoption is determined by a lot of components, together with the situation of issuer’s deposits, home versus international demand and wholesale versus retail demand, the analyst famous.
Tether and Circle maintain simply 0.02% and 14.5% of reserves in financial institution deposits
If stablecoin issuers maintain a big share of their deposits within the banking system the place the stablecoins are issued, the stress for financial institution runs needs to be diminished, Kendrick wrote, including:
“The concept is that if a deposit leaves a financial institution to enter a stablecoin, however the stablecoin issuer holds all of its reserves in financial institution deposits, there could be no internet deposit discount.”
Nevertheless, Tether and Circle — the operators of the world’s two largest stablecoins, USDt (USDT) and USDC (USDC) — maintain simply 0.02% and 14.5% of their reserves in financial institution deposits, respectively, Kendrick reported, including: “So little or no re-depositing is going on.”
Relating to home versus international demand, Kendrick concluded that home demand drains native financial institution deposits, whereas international demand doesn’t.
Associated: BofA CEO flags $6T financial institution deposit danger from stablecoin yield
“We estimate that round two-thirds of stablecoin demand comes from rising markets at current, so one-third comes from developed markets,” he wrote.
He added that, based mostly on a projected $2 trillion market cap, about $500 billion of deposits may go away developed-market banks by end-2028, whereas roughly $1 trillion may exit emerging-market banks.
Kendrick additionally stated Commonplace Chartered nonetheless expects the CLARITY Act to move by the tip of the primary quarter of 2026. He famous that bank-run dangers will not be restricted to stablecoins, but additionally stem from the “inevitable” growth of real-world belongings.
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