South Africa Just Validated Standard Chartered’s Warnings

South Africa’s central bank has echoed a warning from Standard Chartered, confirming that the rapid rise of stablecoins could destabilize emerging-market (EM) banks.

Standard Chartered projects that digital dollars could drain as much as $1 trillion from EM bank deposits over the next three years, as consumers and corporates shift savings toward stable, USD-pegged alternatives.

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Standard Chartered’s Alarm: Emerging-Market Banks at Risk

In a recent research note, Standard Chartered highlighted 48 countries along an opportunity–vulnerability continuum.

As BeInCrypto reported, the bank’s Global Head of Digital Assets Research, Geoff Kendrick, identified Egypt, Pakistan, Bangladesh, and Sri Lanka as most exposed to deposit outflows.

“As stablecoins grow, we think there will be several unexpected outcomes, the first of which is the potential for deposits to leave EM banks,” they told BeInCrypto.

Even in high-risk economies, these outflows could represent roughly 2% of total deposits. While this represents only a small percentage in isolation, it could potentially destabilize countries already facing weak currencies and fiscal deficits.

Likewise, Madhur Jha, Head of Thematic Research, noted that stablecoins are accelerating a structural shift: banking functions are increasingly moving to non-bank digital platforms.

South Africa Confirms Growing Risk

South Africa’s Reserve Bank (SARB) has highlighted the financial stability risks posed by stablecoins and other crypto assets.

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According to the 2025 Financial Stability Review, stablecoin adoption has surged, with trading volumes climbing from 4 billion rand in 2022 to nearly 80 billion rand ($4.6 billion) by October 2025.

The central bank warned that crypto’s fully digital and borderless nature could allow it to circumvent exchange control laws.

Herco Steyn, SARB’s lead macroprudential specialist, emphasized the urgency. He noted that without comprehensive regulations, authorities lack sufficient oversight of these fast-paced markets.

Regulatory Gaps and Market Implications

South Africa is actively developing new rules to bring cross-border crypto transactions under regulatory supervision. Despite this, major platforms like Luno, VALR, and Ovex now serve 7.8 million users and hold roughly $1.5 billion in custody.

The trend toward USD-pegged stablecoins reflects a market preference for lower volatility compared to traditional crypto assets, such as Bitcoin or Ether.

Standard Chartered’s warning, combined with South Africa’s confirmation, highlights the broader risk to EM banking systems.

Economies running twin deficits, including Türkiye, India, Brazil, South Africa, and Kenya, are particularly vulnerable to capital flight fueled by stablecoins.

Therefore, policymakers in emerging markets may be at a crossroads. As stablecoin adoption accelerates, countries must strike a balance between innovation and stability, implementing frameworks that prevent systemic risks while supporting the growth of digital finance.