Bank of America CEO Brian Moynihan told analysts that up to $6 trillion in commercial bank deposits could migrate to stablecoins if legislation allows interest payments on digital dollar holdings.
The figure represents roughly 30% to 35% of total U.S. commercial bank deposits.
Moynihan attributed the projection to Treasury Department studies amid Senate negotiations over provisions restricting stablecoin yields.
The warning comes as Coinbase CEO Brian Armstrong withdrew support for pending crypto legislation Wednesday, citing concerns about stablecoin reward restrictions.
What Happened
Moynihan said stablecoin structures resemble money market mutual funds, with reserves held in short-term instruments like Treasurys rather than recycled into bank lending.
The deposits would sit outside traditional banking systems, shrinking the base banks rely on for household and business loans.
Senate Banking Committee Chair Tim Scott on Jan. 9 released a crypto market structure bill prohibiting digital asset service providers from paying interest on idle stablecoin balances.
The legislation permits activity-based rewards tied to staking, liquidity provision, or collateral posting while banning passive yields.
Over 70 amendments were filed ahead of Wednesday's planned committee markup, highlighting intense lobbying from banking and crypto sectors.
Scott announced late Wednesday the scheduled markup was postponed, stating negotiations continue in good faith.
Armstrong said Coinbase could not support the bill, citing provisions that would kill stablecoin rewards and impose restrictions on tokenized equities and decentralized finance.
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Why It Matters
Banks argue stablecoin yields threaten their deposit bases and lending capacity, forcing reliance on costlier wholesale funding.
Galaxy Research warned earlier this week the bill could enact the largest expansion to financial surveillance authorities since the USA PATRIOT Act.
The firm cited new Treasury Department powers over digital asset transactions, including authority to freeze transactions for 30 days without court orders.
Democratic lawmakers have pushed for ethics provisions following Bloomberg estimates that President Trump generated approximately $620 million from family cryptocurrency ventures.
The proposed legislation would allocate regulatory jurisdiction between the Securities and Exchange Commission and Commodity Futures Trading Commission.
Both Senate Banking and Agriculture committees must advance versions before reconciliation and a full Senate vote.
Without passage in 2026, momentum could stall amid midterm election politics, according to industry analysts who estimate 50-60% odds of enactment.
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