Standard Chartered says stablecoins overshadowed bitcoin in discussions; $750 billion market size could trigger macroeconomic shifts

Stablecoins took center stage in Standard Chartered Bank's recent U.S. meetings, drawing more attention than bitcoin despite its record highs. The bank's global head of digital assets research, Geoffrey Kendrick, said most discussions focused on the potential for stablecoins to impact the broader economy once the market grows to $750 billion.

Kendrick said around 90% of the conversations during his meetings last week with clients and policymakers in Washington, New York, and Boston were about stablecoins. The timing coincided with growing anticipation around the GENIUS Act, a bill expected to set rules for fiat-backed stablecoins and potentially unlock broader institutional adoption.

Once stablecoins reach a $750 billion market size — likely toward the end of 2026, up from around $240 billion today — they will start to have implications for traditional finance assets and policies, Kendrick said.

In the U.S., the amount of Treasury bills, or T-bills, required to back stablecoins will likely require a shift in planned issuance across the curve toward more T-bills and fewer longer-tenor securities, according to Kendrick. "This potentially has implications for the shape of the US Treasury yield curve and demand for USD assets (and hence the USD)," he said.

Overall, in developed markets, after the GENIUS Act passes (possibly as soon as this week), the initial use case for stablecoins is likely to be transactional, Kendrick said. Corporate treasury teams and semi-financial firms may turn to stablecoins for faster, cheaper, and more secure payments. Banks and even municipalities may issue their own stablecoins, Kendrick said.

In emerging markets, stablecoins are being used primarily as a store of wealth. Kendrick said individuals seeking access to U.S. dollar-linked savings in a liquid and trustworthy form are turning to stablecoins to protect their assets. In such cases, he noted, the priority is return of capital, not return on capital.

While it's impossible to pinpoint where the funds are coming from, Kendrick said the total demand from emerging markets may be higher than previously assumed. If large amounts of savings are flowing out through stablecoins, some countries may find it harder over time to manage fixed exchange rates, operate capital controls, or support their domestic banking systems. "Financial stability issues may ensue," Kendrick said.

Kendrick also highlighted the Digital Asset Market Clarity Act, which was introduced in the U.S. House of Representatives in May, and said it is now expected to pass by late September or early October, earlier than previously anticipated. He said the act could provide a regulatory framework for digital assets and digital commodities, with specific implications for the tokenization market. If tokenized assets can be deposited on protocols like Aave, Kendrick noted, decentralized finance or DeFi use cases could expand significantly, potentially including tokenized public equities in addition to traditionally illiquid assets.

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