Standard Chartered Says USDC Faces Competition In Payments, Delays $2T Stablecoin Forecast
Tether (USDT) dominates the saving use case in emerging markets, but Circle’s (CRCL) stablecoin USDC has an early lead in developed-market transactions, said Standard Chartered in a note on Wednesday.The developed-market use case included cross-bank settlement, treasury operations and bank-distributed payments, said analyst Geoff Kendrick. Overall, the push could create a much larger market for stablecoin issuers across the board, he wrote. That puts stablecoins into work traditional finance operators deal with today. The bank expects corporate transactional use in developed markets to rise sharply in 2027, attracting new institutions to issuance and redemption.For now, the firm has pushed its $2 trillion stablecoin forecast back to 2030 from 2028. He noted that stablecoin supply had been stuck in a $300 billion to $320 billion range for the past 12 months and now stands at roughly $309 billion. According to Kendrick, the year-long stall in supply was "cyclical rather than structural." fell more than 6% in midday trade on Wednesday amid broader market weakness. On Stocktwits, retail sentiment around the shares dipped to ‘bearish’ from ‘neutral’ territory over the past day. Sentiment around both and fell to ‘neutral’ from the ‘bullish’ zone.USDC's Turf Is The Most ContestedStandard Chartered said developed-market transactions were the only area where the biggest players have not built a large distribution network. That made it the segment most open to rivals, despite USDC's early lead.The bank pointed out a pressure point for Circle Internet Group (CRCL), which issues USDC. Circle earned $2.9 billion in revenue and reserve income in the 12 months to June 2026, mostly from reserves. Circle has a 50/50 revenue-share agreement with Coinbase (COIN), which was extended earlier this year through to August 2029 on the original 2023 terms.However, Standard Chartered also flagged that changes in how yield was shared may make the commercial arrangement between Circle and Coinbase “untenable."Regulation Is The Key RiskKendrick stated that regulation was the biggest risk to the forecast. The U.S. GENIUS Act, which sets rules for stablecoins, will take effect in January 2027. The key question was whether other countries follow the US lead, the bank said.Tether launched USAT in January as a separate U.S. token to compete under those rules.It has less than $200 million outstanding, according to the report. Standard Chartered was skeptical of bank-issued coins, calling them "a mostly failed experiment." It said the coins that have reached scale, USDT and USDC, were built by issuers, not banks.Moreover, with three-month Treasury bill yields at about 4.1%, a 200-basis-point drop in short-term rates would erase a large share of reserve income for both Circle and Tether, the bank said.Four Jobs For StablecoinsThe bank said stablecoin use had split into four parts. USDT dominated savings in emerging markets, where people used it as a dollar bank account. USDC leads payments and banking-style transactions in developed markets.Both USDC and Ethena's (ENA) USDe are strong as trading rails in crypto. USDC also leads the small but growing AI-to-AI payments segment, mainly on Base and Solana (SOL). The new uses have added to total activity rather than replacing the old ones, the bank said.Stablecoin Transaction Activity Hits A Record $19T, USDC DoublesKendrick said the flat stretch had coincided with weak crypto prices. He noted that past slowdowns had given way to growth once the markets recovered.However, while supply stalled, activity kept climbing, as monthly on-chain transfer value hit a high of $19 trillion in May 2026, according to the report. The monthly average this year was just under $10 trillion, up from $4 trillion in 2025. The bank said velocity had roughly doubled, to about 30 times a month from 15 in 2025.USDC’s velocity rose to about 80 times a month from 45 last year, the firm said. Tether’s stablecoin, USDT, on the other hand, held steady at around seven, since it was mostly held as savings rather than spent, the bank added.