A growing debate in Washington over interest-bearing stablecoins is raising alarms inside the U.S. banking sector. According to Bank of America’s chief executive, regulatory decisions made by Congress could reshape how trillions of dollars move through the financial system.
Stablecoins Could Drain Up to $6 Trillion From Banks
Bank of America CEO Brian Moynihan recently cautioned that as much as $6 trillion in U.S. bank deposits could shift into stablecoins if lawmakers allow these digital assets to pay interest. That amount represents nearly one-third of total commercial bank deposits, based on analysis linked to U.S. Treasury research.
He explained that stablecoins operate more like money market funds, with reserves typically invested in short-term U.S. Treasurys rather than used for traditional bank lending. As a result, funds moving into stablecoins would sit outside the core banking system, reducing the deposits banks depend on to issue loans to consumers and businesses.
Moynihan warned that if deposits leave, banks may be forced to rely on more expensive wholesale funding, which could ultimately raise borrowing costs across the economy.
Lawmakers are now weighing restrictions in a proposed Senate bill that would ban passive interest on stablecoins, while still allowing activity-based rewards tied to staking, liquidity provision, or collateral use. The proposal reflects mounting pressure from banks concerned about lending capacity, while crypto firms argue such limits could undercut innovation and user incentives.
With dozens of amendments under review and strong opposition from parts of the crypto industry, the outcome of this legislation could determine how digital dollars coexist with the U.S. banking system in the years ahead.
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