The financial threat of stablecoins: Bank of America's CEO warns deposits could shift massively to blockchain

One of the executives of one of the largest banks in the United States recently issued an important warning: stablecoins could have far-reaching impacts on the traditional financial system. This “warning” not only concerns financial security but also involves the transfer of trillions of dollars.

Moynihan’s Core Viewpoint: Commitment to Adaptation, but Caution on Risks

Bank of America CEO Moynihan stated at an investor conference that the bank has the ability to respond to the rise of stablecoins and will flexibly adjust strategies based on customer needs. However, he immediately raised a deeper concern—if a large amount of deposits flow into stablecoins and related products, the entire financial system could face serious challenges.

Moynihan pointed out that this is not just an issue for individual institutions but a matter that the entire banking system needs to take seriously. He further explained that deposits are not only the bank’s source of funds but also the foundation of the financial system’s operation. Once this foundation is shaken, the subsequent chain reactions could be immeasurable.

Trillion-Level Transfer Risks

Moynihan’s specific data is concerning: approximately $6 trillion in deposits could shift to stablecoins and other blockchain products. This may sound abstract, but the actual impact is concrete and profound.

When deposits move from banks to stablecoin platforms, banks’ ability to lend to businesses and individuals will decrease accordingly. To make up for the funding gap, banks will be forced to turn to more expensive wholesale financing markets, which will ultimately drive up borrowing costs. The most immediately affected are often small and medium-sized enterprises that rely heavily on funding—they will face higher loan costs.

In reality, Bank of America itself manages $2 trillion in deposits. If a portion of these funds shifts to stablecoins, the severity of its business impact can be imagined.

Regulatory Gaps and Legal Battles

Why do stablecoins pose a threat to banks? An important reason lies in regulatory gaps within the legal framework.

The GENIUS Act introduced last year attempted to establish a federal-level regulatory framework for stablecoins. However, the banking industry generally considers this bill insufficiently strict. They point out that stablecoin issuers are seeking various “creative ways” to offer users interest-like yields—even though laws explicitly prohibit paying interest directly. This practice is essentially a “marginal probing” of regulations.

The American Bankers Association (ABA) recently submitted an official letter to the Senate, explicitly calling for closing these legal loopholes. The association’s members include over 100 financial institutions, representing a unified stance of traditional banking: new or revised regulations must explicitly prohibit stablecoins from serving as interest-bearing deposit substitutes.

Diverging Views in Reality: Not All Financial Institutions Share the Same Perspective

Interestingly, not all large financial institutions agree with Moynihan’s stern assessment. JPMorgan’s official statement is much more moderate. The bank’s representatives believe that multiple layers of currency forms have always existed in financial markets—from central bank-issued base money to institutional commercial money, and then to personal deposits. Stablecoins are just an addition to this multi-layered system.

This view emphasizes the inclusiveness of financial innovation, suggesting that stablecoins, traditional deposits, and other payment methods can coexist and complement each other, rather than being in direct competition.

Weighing the Real Impact

Bank of America’s deposit size is projected to reach $2 trillion by the end of 2025, highlighting the real stakes of this discussion. Is the threat posed by stablecoins truly as serious as Moynihan suggests? It depends on two variables: first, the ultimate direction of the legal and regulatory framework; second, the actual speed and scale at which users choose stablecoins.

In any case, the policy debate surrounding stablecoins is reshaping the competitive landscape of the financial industry. Banks’ ability to raise funds through traditional deposit channels may face unprecedented challenges, and how stablecoins are integrated into the regulatory framework will directly influence the financial ecosystem over the next five to ten years.