A recent study by Standard Chartered warned that stablecoins could drain up to $1 trillion from emerging market (EM) banks over the next three years as savers flock to digital dollar assets.
Although this number represents only about 2% of total deposits in the most vulnerable economies, its structural impact could be historic.
Experts weigh in on Standard Chartered’s $1 trillion stablecoin warning
The report, led by Jeff Kendrick, global head of digital asset research, and Madhur Jha, head of thematic research, identified Egypt, Pakistan, Bangladesh and Sri Lanka as the countries most at risk.
Their findings show that there is a growing shift of banking functions to non-bank digital sectors. This finding comes as stablecoins increasingly offer consumers access to USD-based accounts without traditional intermediaries.
“As stablecoins grow, we believe there will be several unintended consequences, the first of which is a potential outflow of deposits from emerging market banks,” the team said. beincrypt By email.
But not everyone sees the $1 trillion shift as a unilateral outflow. Lisk COO Dominik Schwenter believes Standard Chartered’s warning may be overlooking an important parallel trend: the rise of local currency stablecoins across emerging markets.
“While access to a digital USD remains an important use case, the more meaningful change currently underway is the rapid rise and adoption of local currency stablecoins,” Schwenter told BeInCrypto.
Schwenter cited examples such as Nigeria’s cNGN, Indonesia’s IDRX, and India’s upcoming rupee-denominated stablecoin.
Risk executives say that while stablecoins have the potential to reduce dependence on banks, most users still prefer some form of custodian trust.
“Most people remain uncomfortable with complete self-custody and prefer to park their funds with trusted third parties, such as banks, neobanks, fintechs, and crypto exchanges,” he said.
It is therefore unclear whether behavior will change enough to create large-scale disintermediation, as Standard Chartered suggests.
For him, stablecoins are not meant to replace banks. Rather, it forces evolution. Schwenter explained that stablecoins represent the next step in the evolution of money, making it clear that they disrupt traditional institutions that cannot adapt.
Despite this, he acknowledged that demand remains strong for banks and fintechs that can offer secure storage and an intuitive UX.
Stablecoins as a new dollar standard: a second Bretton Woods?
Robert Schmidt, co-founder of the Coke Protocol, said Standard Chartered’s predictions could indeed signal a “second Bretton Woods”. This signals a moment of structural reorganization in the organization and management of global capital.
Schmidt noted that stablecoins will enable broader adoption of the dollar in emerging economies. This is part of the importance of the United States’ strategic agenda, he said.
“Since Bretton Woods, much of world trade has been settled in dollars. The GENIUS Act and the proliferation of stablecoins in emerging markets will act like a second Bretton Woods. All commerce and transactions, not just goods and trade, will be able to be settled seamlessly using dollar rails at very low cost,” Schmidt told BeInCrypto.
In Schmidt’s view, stablecoins will extend the dollar’s hegemony beyond traditional financial channels and bring the entire economy into a digital dollar system.
If Bretton Woods redefined postwar finance by tying the world system to the US dollar, stablecoins could represent a 21st century reboot. But for emerging markets, this is driven by code, fintech and market demand, not central banks.
Power on the individual and pressure on the state
In particular, stablecoins are both a lifeline and a liability for emerging markets such as Nigeria, Egypt, and Argentina.
On the one hand, they provide citizens with a shield against inflation and capital controls. On the one hand, they threaten central banks’ control over monetary policy.
“Stablecoins are shifting the balance of power in favor of individuals. It’s like the printing press or the internet. These technologies democratized access to information and transformed society,” Schmidt said.
Coke Protocol executives argue that the rise of stablecoins will reshape the structure of financial institutions themselves.
“This tool will have a significant impact on the composition of financial institutions,” he said, noting that individuals are increasingly able to bypass national banking systems altogether.
Regulation and global catch-up
Although both experts agree that regulation will influence the materialization of this transition, their interpretations differ widely.
Schmidt warned that governments with authoritarian tendencies may respond to the introduction of stablecoins with restrictive frameworks “similar to MiCA” to protect currency controls.
“The challenge for cryptocurrencies will be enforcement, especially as privacy tools advance,” he said. “You don’t need anyone’s permission to set up a wallet and exchange USDC.”
But Schwenter argues that emerging markets are not as unregulated as they are often made out to be.
“Countries like Indonesia, Malaysia and Nigeria actually rank higher than many developed countries in terms of regulatory clarity,” he said. “Argentina, Brazil and the Philippines, on the other hand, are roughly on par with parts of Europe.”
He also believes that the US GENIUS Act will put pressure on other countries to accelerate their own frameworks.
The real frontier is necessity, not speculation.
For Schmidt and Schwenter, the growth stories of Web3 in Africa and Asia share a defining characteristic: necessity. In an economy where currencies are unstable and financial systems are collapsing, cryptocurrencies have found true product-market fit, Schmidt said, noting that cryptocurrencies (stablecoins) are solving everyday banking needs.
Schwenter agreed, adding that emerging markets may actually set the global standard for blockchain’s real-world usefulness.
“The widespread adoption of stablecoins in these economies proves the product-market fit,” he said. “They are already deeply integrated into financial and business infrastructure.”
If Standard Chartered is correct, the next three years could see a redefinition of monetary geography, with digital dollars, local stablecoins and tokenized assets coexisting in a fragmented but connected financial ecosystem.
Schmidt envisions it as the “next wave of capital” as venture capital moves from speculative investments in the West to utility-driven startups in the Global South.
Schwenter sees the same direction, noting that Risk’s $15 million EMpower fund is targeting founders in Africa and other emerging markets to help build this future.
The question is not just where capital flows, but who controls it: banks, blockchains, or the billions of individuals who move between them.
If history is any guide, every moment at Bretton Woods has winners and losers. This time, the ledger could be on-chain.
The post Experts Dismantle Warnings on Standard Chartered’s $1 Trillion Stablecoin for Emerging Markets appeared first on BeInCrypto.
