Bank of America is lobbying Congress to pass legislation that will favor banks when determining who can issue stablecoins.
The $284 billion Global Systemically Important Bank (G-SIB) aims to limit non-banks’ legal abilities to create stablecoins.
This year, CEO Brian Moynihan has been working with lobbying groups like the American Bankers Association and Bank Policy Institute, according to The Block. He wants to issue a fully reserved, 1:1 backed “Bank of America coin.”
If the bank’s efforts succeed, it could limit the stablecoin efforts of non-banks like Coinbase, Circle, Amazon, Meta, Tether, and many others.
Read more: PayPal and Ripple stablecoins still sub-1% despite ‘stablecoin gold rush’
Bank of America wants to compete with Circle, Tether
Obviously, Circle is also conducting its own lobbying efforts. The company’s major stablecoin, USDC, has a $60 billion market cap that ranks second only to Tether’s $144 billion USDT.
Unlike Tether, which has a documented history of becoming a target of regulatory enforcement, Bank of America lobbyists are making the case that it will always stay transparent and comply with US laws.
Of course, Bank of America has not always complied with US laws, including underpaying for FDIC insurance, double-charging customers, violating the Home Mortgage Disclosure Act, and a DoJ financial fraud case that led to a penalty exceeding $16 billion.
Both chambers of Congress are considering bills that would regulate stablecoins. Senators, for example, introduced the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act. Representatives in the House introduced the STABLE Act.
Neither bill precludes the possibility that a US-based firm can issue a stablecoin regardless of whether it is a bank.
Bank of America is obviously hoping that language about the bank’s unique ability to operate or collateralize stablecoins could be added to any final bill sent to Donald Trump’s desk for signature.
In addition, Bank of America would prefer rule-making from US government divisions like the US Federal Reserve and Treasury, and their bureaus to give preference or even exclusivity to bank-operated stablecoins.
