Digital asset adoption is creating a half-trillion-dollar headwind for U.S. banks, an analyst at Standard Chartered says.
Are U.S. Bank Deposits at Risk of Being Siphoned Over to Crypto Ecosystem?The analyst says that a good indicator of how at-risk a bank is depends on how much of its total revenue comes from net interest income NIM, since deposits are the main driver of that revenue source.
This means that the smaller regional banks are the most at-risk to the trend, he argues.
Says Kendrick,
“We find that regional U.S. banks are more exposed on this measure than diversified banks and investment banks, which are least exposed.”
FAQ Why are US bank deposits at risk from crypto? Standard Chartered says customers may move funds to blockchains and stablecoins for faster, cheaper, and more attractive financial services. How much money could leave US banks? Analysts estimate up to $500 billion in US bank deposits could shift into the crypto ecosystem by 2028. Which banks are most exposed to this risk? Regional US banks are the most vulnerable because they rely heavily on deposit-driven net interest income. What is driving the rise of stablecoins? USD-pegged stablecoins are growing rapidly due to low-cost, near-instant settlement and trillions of dollars in transaction volume.
