🏦 Citigroup: Stablecoins Could Bleed 6.6 Trillion from Banks

Wall Street just got a wake-up call: Citi analysts say stablecoins could suck trillions from traditional banks, rewriting the rules of global finance.

⚡ Quick Hits

• 💸 6.6T — potential outflow from bank deposits into stablecoins
• 🪙 10% of U.S. money supply could be stablecoin-based by 2028
• ⚡ 13× faster transaction speeds vs. banks
• 📊 1T annual stablecoin volume expected within 3 years
• 🎯 Long game: stablecoin issuers = top U.S. Treasury holders

🚨 Banks vs. Blockchain: A 1980s Remix

Citi is sounding alarms that echo the 1980s money-market fund crisis. Back then, deposits fled banks into higher-yield alternatives, flipping liquidity upside down.

This time? It’s not money market funds — it’s stablecoins.

• Easy, instant, borderless transactions.
• Lower fees, faster settlements.
• Growing trust from retail and institutional players.

And the number? 6.6 trillion at risk of leaving banks for blockchain rails.

🪙 Stablecoins: The New Money Market Funds

Stablecoins like USDT, USDC, and USDe are evolving from “crypto tools” into mainstream cash substitutes.

Citi’s projection:

• 10% of the U.S. money supply could migrate into stablecoins by 2028.
• 1 trillion+ in yearly transaction volume.
• Speed advantage: 13× faster than banks.

For consumers, it means frictionless payments. For banks, it means a shrinking deposit base — and higher funding costs.

📉 Impact on Banks

• Liquidity crunch: fewer deposits = tighter lending.
• Rising costs: higher interest rates for businesses and borrowers.
• Survival mode: banks must innovate or watch deposits vanish into DeFi rails.

As Citi put it: the “banking moat” is eroding.

📈 Stablecoins as Treasury Titans

Fast-forward to 2030: stablecoin issuers could become some of the largest buyers of U.S. Treasuries.

Imagine:

• Tether, Circle, or Ripple holding massive stacks of short-term government debt.
• Stablecoin issuers shaping funding markets like megabanks once did.
• Crypto tokens, not banks, anchoring America’s financial system.

That’s not just disruption — that’s a regime change.

🔮 The Bigger Picture

Stablecoins aren’t just “crypto cousins” anymore. They’re morphing into:

• Payment rails (cheaper, faster, global).
• Financial infrastructure (direct links to U.S. Treasuries).
• Monetary weapons (reshaping dollar dominance).

For regulators and policymakers, the question isn’t if stablecoins matter — it’s how fast they’ll rewire the system.

✍️ TL;DR

Citigroup analysts warn stablecoins could drain 6.6T from U.S. banks by 2028 as deposits flee into faster, cheaper, blockchain-based alternatives. With stablecoins on track to reach 10% of the money supply and issuers poised to become top Treasury holders, the shift could echo the 1980s money-market crisis — but at crypto speed. Banks face higher costs, regulators face tough choices, and stablecoins may quietly become the backbone of U.S. finance.