A fresh warning from Standard Chartered Bank has spotlighted what may become one of the most consequential shifts in modern finance: the mass migration of savings from fragile emerging market banks into U.S. dollar-backed stablecoins—a movement accelerated by President Donald Trump’s sweeping pro-crypto agenda.
In a detailed report released Monday, the London-based bank—one of the most prominent lenders in Africa, Asia, and the Middle East—projected that as much as $1 trillion could leave emerging market banks over the next three years, drawn toward digital assets perceived as safer and more stable.
The report describes stablecoins—digital currencies pegged to the U.S. dollar—as “dollar-based bank accounts without borders,” providing a refuge for savers in countries prone to chronic inflation, currency crashes, and banking crises. Nearly 99 percent of all stablecoins are tied to the U.S. dollar, effectively giving users access to a virtual dollar account outside the traditional banking system.
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The Trump Factor and the Rise of Digital Dollars
The resurgence of stablecoin use coincides with a radical shift in U.S. policy under President Trump, whose administration has openly embraced cryptocurrencies and blockchain innovation as part of its economic strategy. Trump’s government recently pushed through a series of measures designed to make the United States a global leader in digital assets—including the approval of multiple stablecoin frameworks and new licensing rules for crypto companies.
While the new laws bar regulated U.S. stablecoin issuers from offering interest-bearing accounts, a move meant to prevent a run on traditional banks, Standard Chartered analysts say the prohibition is unlikely to slow global adoption.
“Return of capital matters more than return on capital,” the report stated, noting that individuals in unstable economies would continue to prefer digital dollars over local bank deposits, especially in nations where past crises have wiped out savings overnight.
Massive Outflows Looming
The bank estimates that by 2028, total stablecoin savings across developing economies could reach $1.22 trillion, up from $173 billion today. Although that amount represents just about 2 percent of total bank deposits across 16 vulnerable nations, the analysts warned that the shift could erode the liquidity base of several financial systems already struggling to maintain stability.
Countries identified as high-risk include Egypt, Pakistan, Bangladesh, Sri Lanka, Morocco, and Kenya, where local currencies have suffered repeated devaluations in recent years. But the list also extends to larger economies such as Turkey, India, China, Brazil, and South Africa, where twin deficits and exposure to global capital markets make them susceptible to sudden deposit flight during crises.
“Many of them, with the key exception of China, have twin deficits that leave them relatively vulnerable to global risk aversion and sudden sharp currency depreciation,” the report said.
Stablecoins such as Tether’s USDT and Circle’s USDC have quietly become parallel banking instruments, giving users in emerging markets digital access to the dollar without relying on domestic institutions. For many, this is a lifeline against hyperinflation, capital controls, and banking instability.
Tether CEO Paolo Ardoino said last year that the company’s fastest-growing user base was in developing economies, where its USDT coin is viewed as a safe, dollar-like asset. Analysts at Standard Chartered say that the rise of these coins represents a new form of dollarization—one that occurs digitally, bypassing central banks and conventional monetary systems.
The trend has drawn concern from regulators across Africa, Asia, and Latin America. Central banks fear that a large-scale migration into digital dollars could weaken their control over money supply, amplify capital flight, and destabilize local financial systems in times of stress.
Some governments have responded by accelerating plans for Central Bank Digital Currencies (CBDCs), hoping to offer a state-backed digital alternative that could compete with private stablecoins. But economists caution that even CBDCs might inadvertently draw deposits away from commercial banks, given their implicit government guarantees.
A Redefined Global Financial Order
As implications, Standard Chartered indicates that stablecoins are no longer a niche crypto product—they are reshaping global capital flows. The report argues that emerging markets could face liquidity squeezes, reduced lending capacity, and weakened currency stability if policymakers fail to adapt quickly.
Meanwhile, the trend also consolidates U.S. monetary dominance. As Trump’s crypto-friendly framework legitimizes dollar-backed stablecoins, these digital tokens could become the next frontier of American financial power, extending the reach of the dollar deep into the digital economies of the Global South.
In essence, what began as a crypto experiment has now evolved into a structural shift in global finance—one where digital dollars, powered by blockchain and U.S. policy, quietly drain capital from the very banking systems that once anchored emerging economies.