Standard Chartered: Stablecoin Velocity Has Doubled in Two Years

Stablecoins Now Change Hands Six Times a Month

Geoffrey Kendrick, head of digital asset research at Standard Chartered, has flagged a dramatic acceleration in stablecoin velocity — the rate at which fiat-pegged tokens change ownership. According to his analysis reported by The Block, the metric has doubled over the past two years, with tokens now switching hands approximately six times per month on average.

Kendrick acknowledged that this trend contradicts the bank's earlier assumption that velocity would remain stable. The primary catalyst behind the acceleration has been USDC, the stablecoin issued by Circle.

Total stablecoin supply stands at $315.5 billion at the time of publication. Source: DefiLlama

Why This Matters

Standard Chartered's projection that stablecoin supply would reach $2 trillion by 2028 was partly built on the assumption of constant velocity. A doubling of this metric means the existing pool of tokens can service a higher volume of transactions without requiring proportional new issuance. Even as transaction volumes continue growing, the demand for additional stablecoin minting could be lower than previously anticipated.

Kendrick outlined the dynamic clearly: if velocity holds steady, transaction growth will drive demand for more stablecoins. But if velocity keeps rising, that additional demand simply won't materialize — all else being equal.

New Use Cases Reshaping the Market

The analyst attributed the velocity surge to an evolution in how stablecoins are used. Dollar-pegged tokens have moved well beyond their original roles in crypto trading and savings. They increasingly serve as alternatives to traditional financial infrastructure, including emerging applications in AI-powered payments.

Standard Chartered emphasizes that the faster velocity reflects new, incremental demand rather than a wholesale shift in existing usage patterns. The savings segment in emerging markets — dominated by Tether's USDT and characterized by longer holding periods — has not shown a comparable acceleration.

The $2 Trillion Forecast Stands

Despite the shift in velocity dynamics, the bank has maintained its headline forecast: stablecoin supply is still expected to hit $2 trillion by 2028. Total stablecoin market capitalization stood at $315.5 billion at the time of reporting.

If that target is achieved, Standard Chartered estimates it would generate roughly $1 trillion in additional demand for U.S. Treasury bills. The bank's analysts have previously argued that stablecoins will transform global liquidity, trigger an outflow of $500 billion from bank deposits, and become the primary catalyst for mainstream crypto adoption.

However, the velocity factor introduces a new variable into these calculations. It may prove just as consequential as absolute supply when assessing stablecoins' real impact on the broader financial system.

The bullish thesis on stablecoins has found support from other prominent voices as well. In March, former hedge fund manager Stanley Druckenmiller called stablecoins the future of global payments, reinforcing the narrative that their role is expanding rapidly beyond the crypto-native ecosystem.