Bank of America CEO Brian Moynihan told investors at the bank's Q4 2025 earnings conference that while the bank itself would be "fine" if stablecoins gain mainstream adoption, the broader banking system could face $6 trillion in deposit outflows shifting into stablecoins and yield-bearing products. He warned that such a migration would shrink banks' lending capacity, force greater reliance on costlier wholesale funding, and ultimately raise borrowing costs for businesses—especially small and midsize firms.
Risk of a $6 Trillion Deposit Exodus
The discussion was prompted by RBC Capital Markets analyst Gerard Cassidy, who asked about a "looming loophole" that could allow stablecoin deposits to effectively pay interest, even though a statutory ban prevents direct interest payments from issuers. The GENIUS Act, signed into law last year, created a federal framework for stablecoin issuers, but banks argue it lacks sufficient guardrails to prevent stablecoins from functioning as interest-bearing deposit substitutes. Senate debate over a separate crypto market structure bill that would address the loophole stalled after Coinbase withdrew its support.
"Deposits aren't just plumbing—they are funding," Moynihan said. He noted that Bank of America would meet any customer demand but called the systemic risk "the bigger concern we've all expressed to Congress." With $2 trillion in deposits at year-end 2025, even a fraction moving into blockchain-based alternatives would have significant repercussions.
Community Banks vs. Wall Street Titans
Moynihan's stance echoes that of the American Bankers Association (ABA), which represents over 100 community financial institutions. In a Jan. 5 letter to the Senate, the ABA urged closing "dangerous loopholes" in stablecoin legislation, warning that issuers are increasingly offering yield-like incentives that threaten to siphon savings from banks that rely on deposits to fund household and small-business loans.
Yet divisions exist among large lenders. Asked whether stablecoins pose a systemic risk by drawing savings onto blockchains in search of higher yields, a JPMorgan spokesperson downplayed the threat: "There have always been multiple layers of money in circulation... This won't change. Deposit tokens, stablecoins, and all other payment forms will have different but complementary use cases."
Unfinished Regulatory Battle
The GENIUS Act debate remains unresolved. Banks want stronger consumer protections and prudential rules to prevent stablecoins from bypassing the banking system; crypto advocates argue for innovation-friendly regulation. As the stablecoin market expands, the tug-of-war between banks, crypto firms, and lawmakers is far from over.