Financial institution of America CEO Brian Moynihan mentioned the financial institution can be “effective” if stablecoins turned a bigger a part of mainstream finance, however warned that the shift of “$6 trillion in deposit potential” to stablecoins and stablecoin-related merchandise that provide returns commensurate with yield may have a detrimental influence on the broader banking system, as lending capability might be diminished and borrowing prices may rise.
Moynihan spoke about stablecoins at Financial institution of America’s investor convention because the monetary establishment introduced its fourth quarter 2025 outcomes.
RBC Capital Markets analyst Gerald Cassidy requested whether or not U.S. lawmakers intend to shut what he calls an “imminent loophole” that would permit stablecoin deposits to successfully pay curiosity, and what which means for banks because the GENIUS Act, signed into regulation final yr, restructures the principles of the dollar-pegged crypto market. The Senate has been debating provisions in current weeks to regulate loopholes within the Cryptocurrency Market Construction Act, however progress has stalled after Coinbase withdrew its assist.
Whereas the GENIUS Act was supposed to determine a federal framework for stablecoin issuers, banks argue it ought to have included stronger guardrails to stop stablecoins from appearing like interest-bearing deposit substitutes.
Moynihan’s issues echo these of the American Bankers Affiliation (ABA), whose group of greater than 100 regional monetary establishments not too long ago urged U.S. senators to shut what it referred to as a “harmful loophole” in stablecoin laws by new laws. In a Jan. 5 letter to the Senate, stablecoin issuers are more and more discovering methods to supply incentives like yield, regardless of a authorized ban on direct curiosity funds from issuers, threatening to siphon financial savings from banks that depend on deposits to fund loans to households and small companies.
“We’ll be effective,” Moynihan mentioned, including that Financial institution of America will meet buyer demand “it doesn’t matter what surfaces.” However he warned that trillions of {dollars} may transfer into stablecoins and off financial institution stability sheets.
“And that is the larger concern that all of us expressed to Congress,” Moynihan mentioned. He defined that deposits are a supply of funding, not simply plumbing. As deposits go away banks, lending capability shrinks and banks might need to rely extra on wholesale funding, which comes at a value. Because of this, borrowing prices might rise, with small companies more likely to really feel the influence first.
His feedback observe a rising divide in public messaging amongst main monetary establishments as stablecoins inch nearer to the regulatory mainstream. The warnings raised by group bankers will not be broadly shared throughout the banking sector. When requested not too long ago whether or not stablecoins pose a systemic danger by pulling financial savings onto blockchains seeking greater yields, a JPMorgan spokesperson downplayed that menace.
“Within the background, there have been all the time a number of layers of cash in circulation, together with cash held by central banks and industrial cash held by institutional traders,” a spokesperson informed CoinDesk. “This stays true. There can be completely different however complementary use instances for deposit tokens, stablecoins, and all the opposite cost varieties we presently use.”
Financial institution of America ended 2025 with $2 trillion in deposits, highlighting how a lot is in danger if even a small portion of its money is moved to blockchain-based alternate options.
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