Standard Chartered is betting that the next major phase of stablecoin growth will come from tokens that generate yield, forecasting that Sky's (SKY) token could rise roughly fivefold by the end of 2028 as its USDS stablecoin ecosystem expands.
In a research report published Sept. 11, Standard Chartered Global Head of Digital Assets Research Geoff Kendrick initiated coverage of SKY with a $0.325 price target for the end of 2028, up from about $0.065 at the time of the report. The bank expects the increase to broadly track Ethereum's gains while outperforming Bitcoin through the same period.
The larger thesis behind the forecast is the expected expansion of stablecoins. Standard Chartered projects the overall stablecoin market could reach $2 trillion by the end of 2028, although Kendrick said it remains difficult to predict how much of that market will ultimately be made up of yield-bearing products.
That distinction could become increasingly important as financial institutions move deeper into tokenized money.
A consortium of 21 banks including Goldman Sachs, Bank of America, Citi and Deutsche Bank is planning a dollar-backed stablecoin for 2027, while Standard Chartered itself has begun rolling out a Hong Kong dollar-backed stablecoin through its Anchorpoint joint venture.
Sky Turns Stablecoin Liquidity Into A Yield Business
Sky, formerly known as MakerDAO, has built its model around USDS, alongside yield-bearing sUSDS. Standard Chartered describes the ecosystem as resembling a decentralized banking system, with Sky issuing stablecoins, setting governance rules and providing capital to agents at a wholesale rate.
Those agents borrow USDS and deploy the capital into different yield strategies. Standard Chartered said three major agents, Spark, Grove and Obex, collectively had $5.9 billion in USDS borrowings when the report was published.
The structure gives Sky a relatively direct way to turn growth in stablecoin supply into revenue. The bank argues that increasing outstanding USDS loans should increase net interest income, part of which ultimately flows to SKY holders through staking rewards and token buybacks.
Sky's own data also shows the scale of the yield-bearing side of the ecosystem. Its financial dashboard recently reported roughly $4.94 billion deposited into USDS savings, while its sUSDS product currently advertises a variable yield.
The $2 Trillion Stablecoin Question
The more consequential question is whether stablecoins evolve from primarily being digital dollars for payments and trading into yield-generating financial instruments.
The largest stablecoins, including USDT and USDC, currently do not pass reserve income directly to holders. Yield-bearing products take a different approach by allowing users to earn returns while maintaining exposure to a dollar-denominated asset.
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Standard Chartered said that the two models could increasingly diverge as stablecoin use expands, but acknowledged that the eventual market split is difficult to predict.
That uncertainty matters because yield-bearing stablecoins still represent a much smaller segment than the overall stablecoin market. Sky therefore needs both the stablecoin market itself to expand and demand for yield-bearing products to take a larger share of that growth.
The timing also puts Sky into a broader competition for the role stablecoins will play in financial markets. Banks are now exploring their own stablecoins, while traditional asset managers are already involved in tokenized Treasury and real-world-asset strategies used within the Sky ecosystem.
Sky says more than $5.5 billion has been deployed through its agents into instruments and platforms involving firms including BlackRock, Janus Henderson, Anchorage and Securitize.
Sky Needs USDS Borrowing To Keep Scaling
Standard Chartered's 5x forecast depends heavily on Sky expanding the amount of USDS circulating through its agent network.
The current borrowing caps for Spark, Grove and Obex total $17.5 billion, compared with $5.9 billion of existing borrowings. Kendrick estimates that reaching those limits could generate another two to three times growth, assuming interest spreads remain broadly stable. He also expects the caps could eventually be increased or new agents added.
That leaves a clear constraint on the thesis. Sky has demonstrated that its agent model can scale, but Standard Chartered itself says significant further expansion remains unproven. The bank also warns that demand for USDS and other yield-bearing stablecoins will ultimately depend on how stablecoin use cases develop.
The model also carries a different economic profile from a simple token buyback story. Standard Chartered estimates that most of the value returned to SKY holders comes through staking yield, rather than token destruction. At the current structure, 45% of eligible income goes toward SKY staker rewards and 10% toward SKY buybacks.
The Real Bet Is On The Next Stablecoin Cycle
Standard Chartered's SKY forecast is therefore less a standalone call on one DeFi token than a bet on the architecture of the next stablecoin cycle.
The bank expects the value flowing to SKY holders to increase roughly fivefold by the end of 2028, driven by growth in both the Sky ecosystem and USDS outstanding.
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