Bank of America CEO Brian Moynihan said the bank would be “fine” if stablecoins became a larger part of mainstream finance, but warned that the shift of “$6 trillion in deposit potential” to stablecoins and stablecoin-related products that offer returns commensurate with yield could have a negative impact on the broader banking system, as lending capacity could be reduced and borrowing costs could rise.
Moynihan spoke about stablecoins at Bank of America’s investor conference as the financial institution announced its fourth quarter 2025 results.
RBC Capital Markets analyst Gerald Cassidy asked whether U.S. lawmakers intend to close what he calls an “imminent loophole” that could allow stablecoin deposits to effectively pay interest, and what that means for banks as the GENIUS Act, signed into law last year, restructures the rules of the dollar-pegged crypto market. The Senate has been debating provisions in recent weeks to adjust loopholes in the Cryptocurrency Market Structure Act, but progress has stalled after Coinbase withdrew its support.
While the GENIUS Act was intended to establish a federal framework for stablecoin issuers, banks argue it should have included stronger guardrails to prevent stablecoins from acting like interest-bearing deposit substitutes.
Moynihan’s concerns echo those of the American Bankers Association (ABA), whose community of more than 100 regional financial institutions recently urged U.S. senators to close what it called a “dangerous loophole” in stablecoin legislation through new legislation. In a Jan. 5 letter to the Senate, stablecoin issuers are increasingly looking for ways to offer incentives like yield, despite a legal ban on direct interest payments from issuers, threatening to siphon savings from banks that rely on deposits to fund loans to households and small businesses.
“We’ll be fine,” Moynihan said, adding that Bank of America will meet customer demand “no matter what surfaces.” But he warned that trillions of dollars could move into stablecoins and off bank balance sheets.
“And that’s the bigger concern that we all expressed to Congress,” Moynihan said. He explained that deposits are a source of funding, not just plumbing. As deposits leave banks, lending capacity shrinks and banks may have to rely more on wholesale funding, which comes at a cost. As a result, borrowing costs may rise, with small businesses likely to feel the impact first.
His comments track a growing divide in public messaging among major financial institutions as stablecoins inch closer to the regulatory mainstream. The warnings raised by community bankers are not widely shared across the banking sector. When asked recently whether stablecoins pose a systemic risk by pulling savings onto blockchains in search of higher yields, a JPMorgan spokesperson downplayed that threat.
“In the background, there were always multiple layers of money in circulation, including money held by central banks and commercial money held by institutional investors,” a spokesperson told CoinDesk. “This remains true. There will be different but complementary use cases for deposit tokens, stablecoins, and all the other payment forms we currently use.”
Bank of America ended 2025 with $2 trillion in deposits, highlighting how much is at risk if even a small portion of its cash is moved to blockchain-based alternatives.
