U.S. Banking Sector Faces $500 Billion Stablecoin Threat
Written by Ohris M. Greyoon, Blockchain & Crypto Expert
- Stablecoin Loss Projection: Standard Chartered's analysis predicts that by 2028, U.S. banks will lose over $500 billion to dollar-backed stablecoins, with regional banks particularly vulnerable to deposit losses, potentially leading to liquidity crises.
- Regulatory Framework Impact: The U.S. government's GENIUS Act establishes a legal framework for stablecoin issuance and use, prohibiting issuers from offering interest but leaving loopholes for third parties to provide yields, intensifying competition in the banking sector.
- Increased Banking Concerns: Executives in the U.S. banking industry warn that stablecoins could siphon off up to $6 trillion in deposits, approximately 30%-35% of total U.S. commercial bank deposits, posing a significant threat to economic stability.
- Crypto Companies Push Back: Crypto firms counter banks' concerns, asserting that stablecoins do not threaten financial stability, with Circle's CEO highlighting that government money market funds coexist with traditional banks without destabilizing credit markets, indicating potential for stablecoin integration.
About the author
Ohris M. Greyoon
Ohris M. Greyoon holds a Master’s in Computer Science from MIT and has 10 years of experience in blockchain technology and cryptocurrency markets. A pioneer in decentralized finance (DeFi) analysis, he leads Intellectia’s Crypto News, offering cutting-edge insights into digital assets.
