During a Jan. 15 earnings call, the Bank of America CEO told analysts that as much as $6 trillion in deposits could migrate from the United States banking system into stablecoins, roughly 30% to 35% of total U.S. commercial bank deposits.
Moynihan attributed the projection to U.S. Treasury Department studies. It comes at a time when tensions between lawmakers, regulators, and financial institutions over how interest-bearing stablecoins could reshape the country’s banking landscape.
Stablecoins ‘resemble money market funds,’ says Moynihan
Moynihan likened stablecoin structures to money market mutual funds, explaining that reserves are typically held in short-term instruments such as U.S. Treasurys rather than recycled into traditional lending.
“If you take out deposits, they’re either not going to be able to loan or they’re going to have to get wholesale funding, and that wholesale funding will come at a cost,” Moynihan said.
The Bank of America chief warned that a massive deposit exodus could undermine banks’ ability to issue credit to households and businesses, a cornerstone of U.S. economic activity.
Moynihan’s remarks coincided with renewed legislative focus on stablecoins.
The latest version of the Senate crypto market structure bill, released by Senate Banking Committee Chair Tim Scott on Jan. 9, includes provisions banning digital asset service providers from paying interest or yield to users for simply holding stablecoins.
However, the draft legislation allows “activity-based” rewards, such as incentives linked to staking, liquidity provision, or collateral posting.
Over 70 amendments were reportedly filed ahead of a planned committee markup this week, reflecting intense lobbying from both crypto and banking sectors.
Beyond banking concerns, the bill has also drawn scrutiny from the crypto industry and privacy advocates.
A Galaxy Research report warned it could bring about “the single largest expansion to financial surveillance authorities since the USA PATRIOT Act,” granting sweeping new powers to the Treasury Department over digital asset transactions.
Coinbase CEO Brian Armstrong announced on Wednesday that the exchange could no longer support the bill, arguing that it would “kill rewards on stablecoins.”
Later that day, Sen. Scott postponed the markup session, saying, “Everyone remains at the table working in good faith.
Bank of America quietly deepens its crypto footprint
Despite Moynihan’s caution over stablecoins, Bank of America, the world’s second-largest bank by market capitalization, has been steadily increasing its involvement in the digital asset sector.
Back in February, Moynihan said the bank was preparing to launch its own stablecoin once regulations allow. Now, new internal guidance shows the banking giant is openly advising clients to consider crypto exposure.
ABOUT STABLECOINS
A stablecoin is a type of cryptocurrency designed to maintain a stable value by pegging it to a stable asset, like the US dollar, gold, or other fiat currencies, to avoid the high volatility of assets like Bitcoin, acting as a bridge between traditional finance and the crypto world for reliable transactions and storing value. They work by holding reserves or using algorithms to keep their price steady (e.g., 1 stablecoin = $1), making them useful for payments and trading within the crypto market, though risks like depegging still exist.
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