Bank of America CEO warns up to $6 trillion in deposits could shift to stablecoins if allowed to pay interest

Bank of America CEO Brian Moynihan told analysts during a Wednesday earnings call that as much as $6 trillion in deposits could migrate from the U.S. banking system into stablecoins — a figure that would amount to roughly 30% to 35% of total U.S. commercial bank deposits.

The projection, which Moynihan attributed to Treasury Department studies, centers on a legislative dispute over interest-bearing stablecoins and their impact on commercial bank liabilities.

Moynihan said stablecoin structures resemble money market mutual funds, with reserves held in short-term instruments such as U.S. Treasurys rather than recycled into bank lending. In that setup, he said, funds sit outside the traditional banking system, shrinking the deposit base banks rely on to support loans to households and businesses.

“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.

Legislative efforts to address these concerns are currently focused on the latest negotiated crypto market structure bill proposal released by Senate Banking Committee Chair Tim Scott on Jan. 9. The draft text includes a provision that prohibits digital asset service providers from paying interest or yield to users for merely holding stablecoins.

Notably, the bill introduces a distinction for activity-based rewards, permitting incentives tied to staking, providing liquidity, or posting collateral, while banning rewards for idle balances sitting in accounts.

Bill pressure builds as Senate clock runs down

Moynihan’s remarks arrived as the Senate Banking Committee faced a deadline-driven push to iron out remaining disputes in the bill. As The Block previously reported, over 70 amendments were filed ahead of a planned committee markup on Wednesday, highlighting the intense lobbying from both crypto and banking sectors.

Stablecoin yield rules are not the only unresolved issue. Some Democratic lawmakers have pushed for ethics provisions to be included in the legislation. This follows a Bloomberg report estimating that President Donald Trump generated about $620 million from his family’s cryptocurrency ventures.

The bill’s latest draft has also raised alarms beyond the banking industry. A report from Galaxy Research published earlier this week warned the legislation could enact “the single largest expansion to financial surveillance authorities since the USA PATRIOT Act,” citing new Treasury Department powers over digital asset transactions.

Amid these disputes, a major industry player withdrew its support. Coinbase CEO Brian Armstrong announced Wednesday that the exchange could not support the bill, citing concerns that included provisions he said would “kill rewards on stablecoins.”

Later on Wednesday, Senate Banking Committee Chair Tim Scott announced the scheduled markup was postponed. Scott stated that “everyone remains at the table working in good faith.”

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