Stablecoin circulation accelerates, prompting Standard Chartered to revise long-term forecasts

Standard Chartered analysts have highlighted an unexpected acceleration in the circulation speed of stablecoins, underlining its emerging importance as a key variable in long-term industry projections. Geoffrey Kendrick, the bank’s head of digital asset research, noted that the frequency at which stablecoin tokens change hands has surged in recent months, diverging notably from previous assumptions and traditional models.

Rising circulation speed reshapes industry dynamics

According to Kendrick, the projection that stablecoin supply could reach $2 trillion by 2028 is closely linked to how often tokens are used. While higher turnover rates boost transaction volumes, they can also limit the need to issue new stablecoins, making it essential to monitor circulation velocity. This shift demands renewed attention as it could influence both the expansion and design of stablecoin ecosystems in unexpected ways.

Published data reveals that, over the past two years, the average circulation speed of stablecoins has roughly doubled, reaching levels where tokens change holders six times per month. This surge is especially pronounced for USDC, with its usage accelerating markedly across various blockchain networks.

Standard Chartered links this rapid rise to the broadening range of stablecoin applications. Today, stablecoins are no longer limited to crypto trading or as a savings vehicle. Increasingly, they are being adopted as alternative payment instruments within traditional financial systems and as a means of settlement within AI-enabled transactions.

Expanding use cases and long-term outlook

Kendrick suggests that the growing velocity of stablecoins points to the emergence of new and diverse sources of demand, rather than a uniform shift across the market. Notably, in developing economies where stablecoins are used more for savings, this acceleration is less pronounced. In these contexts, Tether’s USDT remains the dominant token in circulation, maintaining its market leadership despite evolving patterns elsewhere.

The bank maintains a positive long-term outlook despite recent changes. According to its projections, the aggregate supply of stablecoins is expected to expand considerably in the coming years, likely driving additional demand for U.S. Treasury bonds. Against this backdrop, stablecoins are regarded as having significant potential to reshape global liquidity flows.

Additionally, there is a prevailing view that stablecoins could attract substantial funds away from traditional bank deposits in emerging markets and play a pivotal role in broader crypto adoption. As financial infrastructure evolves, stablecoins appear poised to fill useful gaps both within and beyond the crypto sector.

Conversely, if the increased transaction activity occurs while circulation speed remains stable, it may encourage the issuance of new stablecoins. However, should the velocity continue to climb, this relationship could weaken, moderating the impact of rising volumes on token supply growth.

According to the bank’s assessment, as stablecoins find firmer ground in payments, capital markets, and automation-driven transactions, the velocity of tokens will become as pivotal as overall supply—if not more so—in shaping future market dynamics.