Overview
- Brian Moynihan cited U.S. Treasury analyses in estimating that up to $6 trillion, or roughly one-third of commercial bank deposits, could migrate if stablecoins pay passive interest.
- He likened interest-bearing stablecoins to money market funds that park reserves in short-term Treasurys rather than supporting bank lending, which he said could constrain credit.
- Moynihan warned that deposit outflows would push banks toward costlier wholesale funding, raising borrowing costs with small and medium-sized businesses most exposed.
- The latest Senate draft released January 9 would prohibit passive yields on stablecoin balances while allowing limited rewards tied to specific actions such as transactions or loyalty programs.
- Coinbase withdrew support for the bill, with CEO Brian Armstrong arguing it would kill stablecoin rewards and curtail other crypto activity, while Chairman Tim Scott delayed the markup to refine the legislation.