Brian Moynihan estimates that up to $6 trillion in deposits could leave US banks for stablecoins if they offered interest, nearly a third of the total.
A Systemic Threat to the Banking Model?
The warning was issued during the quarterly earnings presentation of Bank of America. According to Moynihan, this estimate is based on US Treasury studies. The scenario is simple: if stablecoins can offer a comparable or higher yield than traditional bank deposits, a significant portion of savings could migrate out of the banking system.
The issue for banks is not just competition; it is structural. Stablecoins are backed by reserves invested mostly in Treasury securities or liquid monetary instruments. Unlike bank deposits, these funds are not reinvested in the economy through credit.
Less deposits mean less capacity to lend to households and businesses. Banks would then be forced to fund themselves in wholesale markets at a higher cost, with a direct impact on credit rates and sector profitability.
If you remove deposits, either they won’t be able to make loans, or they will have to obtain wholesale funding, and this wholesale funding will have a cost.
The Crux of the Debate: Stablecoin Yields
It is precisely to avoid this scenario that US banks are exerting intense pressure on legislators. The bill on crypto market structure, currently being debated in the Senate, aims to ban payment of interest or passive returns on stablecoins simply held in the portfolio.
However, the text introduces a key nuance. Rewards known as “active” would remain allowed. In other words, yields linked to specific activities like staking, providing liquidity, or collateral contributions would not be affected by the ban. An attempt at compromise seeking to slow the outflow of bank deposits without completely stifling crypto innovation.
This distinction is far from unanimous. For crypto players, it artificially penalizes stablecoins compared to banking products or money market funds. For banks, it may not go far enough.
A High-Stakes Political Battle
The debate occurs in an explosive legislative context. Over 70 amendments were submitted before the bill examination in the Senate committee, revealing the intensity of lobbying from both sides. In addition, there are political tensions, especially regarding the links between the American president and several crypto projects, complicating any search for compromise.
The timeline is tight, and the outcome is uncertain. The recent postponement of the validation session shows that negotiations are far from over. Some major players in the sector, including large crypto platforms, have already withdrawn their support for the bill, considering it directly threatens the stablecoins economy.
A Strategic Choice for the Future of the Digital Dollar
Behind this showdown lies a fundamental question: who will control the digital form of the dollar. If stablecoins become mass yield instruments, they could reshape the American financial architecture. Conversely, a too strict ban could hinder innovation and push these uses outside the United States.
For Brian Moynihan, the message is clear. Letting trillions of dollars in deposits flow to stablecoins would not be simply a market adjustment but a major shock to the banking system and the financing of the real economy.
