Bank of America CEO: Interest-Bearing Stablecoins Could Take $6T Out of Bank Deposits
Bank of America CEO Brian Moynihan warns that interest-bearing stablecoins could divert up to $6 trillion from traditional bank deposits, reducing banks’ lending capacity and potentially harming small and medium-sized businesses that rely more on bank loans. His comments come as the Senate Banking Committee debates a bill that would restrict stablecoins from paying interest unless linked to specific activities like transactions or loyalty programs. Moynihan likens stablecoins to money market funds, arguing they would force banks to seek more expensive wholesale funding, thereby increasing borrowing costs overall. In contrast, Coinbase CEO Brian Armstrong opposes the bill, claiming it unfairly restricts stablecoin rewards and crypto innovation while giving banks an advantage. Armstrong also criticizes provisions limiting tokenized equities and increasing government access to crypto transactions. Radi El Haj of RS2 adds that regulation should encourage competition and consumer protection, not shield banks from market dynamics, emphasizing that customers will naturally seek better value offers like stablecoins.
