Standard Chartered reports a doubling in stablecoin turnover over two years, with implications for market dynamics and future forecasts.
Standard Chartered reports a notable increase in stablecoin turnover, which has doubled within the last two years, indicating a rising frequency of transactions. Jeffrey Kendrick, the bank’s head of digital asset research, emphasized this trend, stating that stablecoins are changing hands approximately six times per month on average.
“The [metric] has increased, which contradicts our assumption of its stability,” Kendrick remarked.
The surge in turnover is significantly influenced by the USDC coin from Circle, which has become increasingly relevant in various financial applications. Standard Chartered forecasts that the stablecoin market could reach a value of $2 trillion by 2028, a prediction supported by the observed increase in usage frequency. This rise could impact the need for new stablecoin issuance, even as transaction volumes grow.
Emerging Use Cases
Kendrick noted that stablecoins are evolving beyond their traditional roles in crypto trading and savings, now serving as viable alternatives to conventional financial systems and facilitating AI-driven payments. He pointed out that this shift in usage reflects a growing demand for stablecoins, rather than a general change in their application.
In contrast, in emerging markets, the dynamics of stablecoin usage, particularly with USDT from Tether, have not exhibited similar trends.
Steady Forecast
Despite these changes, Standard Chartered maintains its prediction of a $2 trillion stablecoin supply by 2028, up from the current $315.5 billion. This anticipated growth in market capitalization is expected to drive demand for U.S. Treasury bills by approximately $1 trillion.
Bank representatives have previously suggested that stablecoins could revolutionize global liquidity and lead to significant shifts in banking deposits, with an estimated $500 billion potentially flowing out of traditional banks. However, Kendrick cautioned that the velocity of stablecoins might be as critical as their supply volume.
“If the metric remains constant, the growth in transactions will create demand for more stablecoins. If it increases, that won’t happen, all else being equal,” Kendrick concluded.
In a related note, former hedge fund manager Stanley Druckenmiller recently referred to stablecoins as the future of global payments.
