BofA Warns $6T Could Shift to Interest‑Bearing Stablecoins, Pressuring Banks

Bank of America CEO Brian Moynihan warned that up to $6 trillion — roughly 30–35% of U.S. commercial bank deposits — could migrate into interest-bearing stablecoins if U.S. market-structure legislation permits them. He said such outflows would mirror past money-market runs, shrinking bank balance sheets, reducing lending capacity, forcing reliance on costlier wholesale funding and likely raising borrowing costs, with small and medium-sized businesses most exposed. The remarks came amid Senate debate over a market-structure bill (drafts include the GENIUS Act and related proposals) that would clarify stablecoin rules and contains contentious language on whether payment-purpose stablecoins can pay interest or offer rewards. Crypto leaders (including Coinbase’s Brian Armstrong) and investors argue that interest-bearing stablecoins and on-chain rewards spur innovation and liquidity, while banks and some regulators warn of systemic risks to deposit insurance and bank funding. Prior Treasury estimates and analyses cited by Moynihan put potential deposit migration as high as $6–6.6 trillion. For traders: ongoing regulatory uncertainty is a major driver — a restrictive rule banning interest/rewards could limit on-chain yield options and slow stablecoin adoption, while a permissive regime could accelerate USD flows into crypto rails, increase stablecoin supply and on-chain liquidity, and shift funding dynamics across banks and crypto platforms. Monitor legislative developments, regulator statements, and major exchange ’rewards’ programs: each will directly affect stablecoin demand, funding costs in traditional finance, and short-term risk sentiment across equities and crypto markets.