The sharp rise in stablecoin usage could drain as much as $1 trillion from emerging market banks over the next three years as savers seek the safety and liquidity of dollar-pegged digital assets, Standard Chartered said in a Monday report.

Stablecoins are giving households and companies in developing economies an alternative to local banks, accelerating a post-financial-crisis shift of core banking functions into the non-bank sector, analysts Geoff Kendrick and Madhur Jha wrote.

Stablecoins are cryptocurrencies whose value is tied to another asset, such as the U.S. dollar or gold. They play a major role in cryptocurrency markets, providing among other things a payment infrastructure, and are also used to transfer money internationally.

Adoption of these cryptocurrencies has been stronge

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