Stablecoins represent lower credit risks than banks, Standard Chartered

Standard Chartered has predicted that more than $1 trillion may exit emerging market banks and flow into stablecoins by ￰0￱ to the Multinational Bank, there will be a shift of payment networks and other core banking activities from the bank sector to the non-bank ￰1￱ Chartered said stablecoins used for savings in emerging markets may increase from $173 billion to $1.22 trillion within the next three ￰2￱ bank stated that the biggest disruption from stablecoins is likely to come from emerging markets, where access to US dollars has historically been ￰3￱ to the bank, as stablecoins become more popular in emerging markets (EM), users may use them to access what’s essentially a US dollar-based account.

“Stablecoin ownership has been more prevalent in EM than DM, suggesting that such diversification is also more likely in EM,” Standard Chartered said. “Stablecoins represent lower credit risks than banks” Stablecoins represent lower credit risks than deposits held in their local banks because they give users digital access to a USD account 24 hours a day, seven days a ￰4￱ is because the US GENIUS Act requires them to be fully backed by ￰5￱ that end, Standard Chartered said this change increases the risk of deposit flight from EM banking systems to crypto ￰6￱ fact, according to the bank estimates , two-thirds of the current stablecoin supply is already in savings wallets across emerging markets.

Also, Standard Chartered added that countries with high inflation, weak reserves, and large remittance inflows are likely to see deposits leave their banks and migrate to ￰7￱ instance, Venezuela, which has an annual inflation rate between 200% and 300%, and with the bolivar’s value collapsing, citizens have turned to ￰8￱ Chainalysis’ 2024 crypto adoption report, Venezuela ranked 13th and showed a 110% increase in crypto usage throughout the ￰9￱ addition, countries like Argentina and Brazil are also increasingly substituting savings into USDC and USDT to dodge ￰10￱ businesses in these countries have also started to accept stablecoins as a form of ￰11￱ record an ATH in net creations in Q3 Stablecoins has reported that Q3 is their biggest quarter on ￰12￱ to on-chain data, the industry has seen an estimated $45.6 billion to $46.0 billion in net ￰13￱ translates to a 324% jump from Q2’s $10.8 ￰14￱ rise was contributed to by Tether’s USDt, which added approximately $19.6 billion, Circle’s USDC, which added approximately $12.3 billion, and Ethena’s USDe, which added approximately $9 ￰15￱ is a mix of established large-scale designs with rising interest in newer, yield-linked ￰16￱ market performance.