Bank of America CEO Brian Moynihan warned on a recent earnings call that allowing stablecoin issuers to offer interest could trigger a massive deposit outflow. Moynihan specified that up to $6 trillion could exit the U.S. banking system.
Such a shift would significantly diminish banks’ ability to lend by shrinking their funding base. Banks would alternatively be forced to seek more expensive wholesale funding sources.
This increase in funding costs would likely be passed on to consumers and businesses through higher borrowing rates. Moynihan’s comments arrive as U.S. lawmakers debate cryptocurrency legislation.
The issue of yield on stablecoins remains a key discussion point in the legislative debate. While Bank of America would adapt to customer demand, Moynihan noted that the broader banking system faces harm from such a large-scale deposit migration.