Standard Chartered Sees Yield-Bearing Stablecoins Fueling Sky's Fivefold Growth Forecast

Standard Chartered believes stablecoins that generate yield will drive growth in the market. The bank's Global Head of Digital Assets Research, Geoff Kendrick, forecasts Sky's (SKY) token could reach $0.325 by the end of 2028, up from around $0.065 at the time of the report.

The forecast assumes a fivefold increase in the token's value, which would broadly track Ethereum's gains while outperforming Bitcoin over the same period. Kendrick estimates that reaching borrowing limits could generate another two to three times growth, assuming interest spreads remain stable.

Standard Chartered projects the overall stablecoin market could reach $2 trillion by 2028, although Kendrick notes it's difficult to predict how much of that will be made up of yield-bearing products. The bank argues that increasing outstanding USDS loans should increase net interest income, part of which flows to SKY holders through staking rewards and token buybacks.

The Sky ecosystem resembles a decentralized banking system, with the issuer providing capital to agents at a wholesale rate. These agents borrow USDS and deploy it into different yield strategies. Standard Chartered notes that three major agents had $5.9 billion in USDS borrowings when the report was published, while its own data shows around $4.94 billion deposited into USDS savings.