Overview
- Brian Moynihan cited U.S. Treasury analyses in estimating that roughly 30%–35% of commercial bank deposits could shift into yield-paying stablecoins.
- He likened such stablecoins to money market mutual funds that park reserves in short-term Treasurys rather than funding loans.
- Moynihan warned that deposit outflows would force banks to rely more on costlier wholesale funding, raising borrowing costs and pressuring small and mid-sized businesses.
- The Senate Banking Committee’s Jan. 9 draft would prohibit interest on idle stablecoin balances while allowing rewards tied to transactions, remittances, or loyalty programs.
- Coinbase and CEO Brian Armstrong withdrew support for the bill, arguing the proposed changes would kill stablecoin rewards and constrain broader crypto activity.