Bank of America CEO says stablecoins could drain trillions in bank deposits

Source: CryptoNewsNet Original Title: Bank of America CEO says stablecoins could drain trillions in bank deposits Original Link: Bank of America CEO Brian Moynihan said his bank will be “fine” if stablecoins become a larger part of mainstream finance, but warned that the broader banking system could be harmed by the “possibility of $6 trillion in deposits” moving into stablecoins and stablecoin-linked products offering yield-like returns, as these could reduce lending capacity and push up borrowing costs.

Moynihan spoke about stablecoins during a Bank of America investor conference as the financial institution presented its Q4 results.

RBC Capital Markets analyst Gerard Cassidy asked whether U.S. lawmakers would close what he called a “looming loophole,” one that could allow stablecoin deposits to effectively pay interest, and what that might mean for banks as the GENIUS Act signed into law last year reshapes the rules of the dollar-pegged crypto market. The Senate has been debating provisions adjusting that loophole in a crypto market structure bill in recent weeks, though progress stalled after certain industry participants withdrew support.