Bank of America CEO Brian Moynihan issued a stark warning during the bank's Wednesday earnings call, stating that up to $6 trillion in U.S. commercial bank deposits could migrate into stablecoins under certain regulatory outcomes. This figure represents roughly 30% to 35% of all U.S. commercial bank deposits.
Moynihan linked this potential mass deposit flight directly to the ongoing legislative debate over interest-bearing stablecoins. He argued that if stablecoin issuers are allowed to offer yield on passive balances, they would create a bank-like product without bank-style regulation, accelerating deposit outflows from traditional lenders. He based his estimate on studies from the U.S. Treasury Department.
"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," Moynihan said, adding that alternative funding sources for banks would likely come at a higher cost, which could raise borrowing costs across the economy, particularly for small and medium-sized businesses.
Moynihan explained that many stablecoin models resemble money market mutual funds rather than traditional deposits, as reserves are typically held in short-term instruments like U.S. Treasurys instead of being recycled into loans for households and businesses. This dynamic, he warned, could shrink the deposit base banks rely on to fund the economy.
The warning comes as the Senate Banking Committee, chaired by Tim Scott, races to finalize a negotiated crypto market structure bill. The latest draft, released on January 9, includes language that would bar digital asset service providers from paying interest or yield to users simply for holding stablecoins. However, it does allow for activity-based rewards tied to functions like staking or liquidity provision.
Pressure on the bill has intensified, with over 70 amendments filed ahead of a planned markup, reflecting heavy lobbying from both banking groups and crypto firms. The committee has since postponed the scheduled markup, with negotiations ongoing.
Industry support has fractured, with Coinbase CEO Brian Armstrong stating the exchange could not back the bill due to provisions he argued would effectively eliminate stablecoin rewards. A recent report from Galaxy Research also warned the bill could significantly expand Treasury Department surveillance powers over digital asset transactions.
