Bank of America CEO Brian Moynihan said his bank will be “fine” if stablecoins become a larger part of mainstream finance, but warned that the broader banking system could be harmed by the “possibility of $6 trillion in deposits” moving into stablecoins and stablecoin-linked products offering yield-like returns, as these could reduce lending capacity and push up borrowing costs.
Moynihan spoke about stablecoins during a Bank of America investor conference as the financial institution presented its Q4 2025 results.
RBC Capital Markets analyst Gerard Cassidy asked whether U.S. lawmakers would close what he called a “looming loophole,” one that could allow stablecoin deposits to effectively pay interest, and what that might mean for banks as the GENIUS Act signed into law last year reshapes the rules of the dollar-pegged crypto market. The Senate has been debating provisions adjusting that loophole in a crypto market structure bill in recent weeks, though progress stalled after Coinbase withdrew its support.
The GENIUS Act aimed to establish a federal framework for stablecoin issuers, but banks have argued it should have included stronger guardrails preventing stablecoins from functioning like interest-bearing deposit substitutes.
Moynihan’s concerns echo those of the American Bankers Association (ABA), whose community of more than 100 community financial institutions recently urged U.S. senators to close what they referred to as “dangerous loopholes” in stablecoin legislation through the newer bill. In their Jan. 5 letter to the Senate, they said stablecoin issuers are increasingly finding ways to offer yield-like incentives, despite a statutory ban on interest payments from issuers directly, threatening to siphon savings away from banks that rely on deposits to fund loans to households and small businesses.
Moynihan said, “we’ll be fine,” adding that Bank of America would meet customer demand “whatever may surface.” But he warned trillions of dollars could shift into stablecoins, migrating off bank balance sheets.
“And that is the bigger concern that we’ve all expressed to Congress,” Moynihan said. He explained that deposits aren’t just plumbing, they are funding. If deposits move out of banks, lending capacity shrinks, and banks may have to rely more on wholesale funding, which comes at a cost. That, in turn, could raise borrowing costs, with smaller and midsize businesses likely feeling the impact first.
His comments track a growing split in public messaging among large lenders as stablecoins inch closer to the regulated mainstream. The alarm raised by community bankers is not universally shared across the banking sector. When recently asked whether stablecoins pose a systemic risk by drawing savings onto blockchains in search of higher yields, a JPMorgan spokesperson downplayed the threat.
“On background, there have always been multiple layers of money in circulation, including central bank-held money and institutional, commercial money,” the spokesperson told CoinDesk. “This won’t change, there will be different, but complementary, use cases for deposit tokens, stablecoins and all the other forms of payments we have today.”
Bank of America ended 2025 with $2 trillion in deposits, underscoring just how much is at stake if even a fraction of cash migrates into blockchain-based substitutes.
