Standard Chartered’s recent research 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.
While that figure represents only around 2% of total deposits across the most vulnerable economies, the structural implications could be historic.
Experts Weigh in on Standard Chartered’s $1 Trillion Stablecoin Warning
The report, led by Geoff Kendrick, Global Head of Digital Assets Research, and Madhur Jha, Head of Thematic Research, flagged Egypt, Pakistan, Bangladesh, and Sri Lanka as the most exposed.
Their findings indicate a growing migration of banking functions to the non-bank digital sector. This finding came as stablecoins increasingly offer consumers access to a USD-based account without traditional intermediaries.
“As stablecoins grow, we think there will be several unexpected outcomes, the first of which is the potential for deposits to leave EM banks,” the team told BeInCrypto in an email.
However, not everyone sees the $1 trillion shift as a one-way outflow. Dominic Schwenter, COO at Lisk, believes Standard Chartered’s warning may overlook a key parallel trend: the rise of local-currency stablecoins across emerging markets.
“While access to digital US dollars remains a key use case, the more meaningful shift now underway is the rapid rise and adoption of local currency stablecoins,” Schwenter told BeInCrypto.
Schwenter cited examples such as the cNGN in Nigeria, IDRX in Indonesia, and India’s upcoming rupee-backed stablecoin.
According to the Lisk executive, while stablecoins might reduce reliance on banks, most users still prefer some form of custodial trust.
“Most people remain uncomfortable with full self-custody and prefer to entrust their funds to a reliable third party — whether a bank, neo-bank, fintech, or crypto exchange,” he said.
Therefore, it is uncertain whether behavior will shift enough to produce large-scale disintermediation, as Standard Chartered alludes to.
To him, stablecoins are not replacing banks. Rather, they are forcing evolution. Schwenter described stablecoins as representing the next step in the evolution of money, articulating that they will disrupt legacy institutions that fail to adapt.
Nevertheless, he conceded that there will still be strong demand for banks and fintechs that can offer secure custody and intuitive UX.
Stablecoins As the New Dollar Standard: A Second Bretton Woods?
Elsewhere, Robert Schmitt, co-founder of Cork Protocol, says Standard Chartered’s projection could signal nothing short of a “second Bretton Woods.” This alludes to a moment of structural realignment in organizing and controlling global capital.
Schmitt cited stablecoins enabling a much more widespread adoption of dollars in emerging economies. This, he said, is part of their importance in the US strategic agenda.
“Following Bretton Woods, much of the global trade was settled in dollars. The GENIUS Act and the proliferation of stablecoins in emerging markets act like a second Bretton Woods; instead of just commodities and trade, all commerce and transactions can be seamlessly settled using dollar rails at very low cost.” Schmitt told BeInCrypto.
In Schmitt’s view, stablecoins extend dollar hegemony beyond traditional financial channels, bringing entire economies into the digital dollar system.
If Bretton Woods redefined post-war finance by tying the global system to the US dollar, stablecoins could represent a 21st-century reboot. For emerging markets, however, this is driven by code, fintechs, and market demand, rather than central banks.
Power to the Individual — and Pressure on the State
Notably, stablecoins are both a lifeline and a liability for emerging markets like Nigeria, Egypt, and Argentina, among others.
On the one hand, they offer citizens a shield against inflation and capital controls. On the other 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 societies,” Schmitt noted.
The Cork Protocol executive argues that the rise of stablecoins will reshape the structure of financial institutions themselves.
“This tool will have a meaningful impact on the makeup of financial institutions,” he said, noting that individuals can increasingly bypass national banking systems entirely.
Regulation and the Global Catch-Up
While both experts agree that regulation will shape how this transition takes shape, their interpretations diverge sharply.
Schmitt warns that authoritarian-leaning governments may respond to stablecoin adoption with restrictive frameworks, “similar to MiCA,” to protect their monetary control.
“The challenge with crypto, especially as privacy tools advance, will be enforcement,” he said. “You don’t need anyone’s permission to set up a wallet and exchange USDC.”
Schwenter, however, argues that emerging markets are not as unregulated as often portrayed.
“Countries like Indonesia, Malaysia, and Nigeria actually rank higher in regulatory clarity than many advanced economies,” he said. “Meanwhile, Argentina, Brazil, and the Philippines are roughly on par with parts of Europe.”
He also believes the GENIUS Act in the US will pressure other countries to accelerate their own frameworks.
The Real Frontier Is Necessity, Not Speculation
For Schmitt and Schwenter, Africa’s and Asia’s Web3 growth stories share a defining feature: necessity. In economies with unstable currencies and broken financial systems, crypto has found true product–market fit, with Schmitt noting that it (stablecoins) solves day-to-day banking needs.
Schwenter agrees, adding that emerging markets may actually set the global standard for blockchain’s real-world utility.
“The widespread adoption of stablecoins across these economies has proven product–market fit,” he said. “They’re already deeply integrated into financial and business infrastructure.”
If Standard Chartered is right, the next three years could see a redefinition of monetary geography, where digital dollars, local stablecoins, and tokenized assets coexist in a fragmented but connected financial ecosystem.
Schmitt frames it as the “next capital wave,” where venture capital is shifting from speculative Western bets to utility-driven startups in the Global South.
Schwenter sees the same direction, noting that Lisk’s $15 million EMpower Fund targets founders in Africa and other emerging markets to help build this future.
At stake is not just where capital flows, but who controls it — the banks, the blockchains, or the billions of individuals walking between them.
If history is any guide, every Bretton Woods moment comes with winners and losers. This time, the ledger might be on-chain.
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