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Bank of America CEO Warns: Interest-Bearing Stablecoins Could Drain Up to $6 Trillion in Deposits from US Banking System
Summary: According to Cointelegraph, Bank of America CEO Brian Moynihan warned during an earnings call that interest-bearing stablecoins could potentially drain up to $6 trillion in deposits from the US banking system. Moynihan cited research referenced by the US Treasury Department indicating that a significant amount of bank deposits could shift to stablecoins due to such ...
According to Cointelegraph, Bank of America CEO Brian Moynihan warned during an earnings call that interest-bearing stablecoins could potentially drain up to $6 trillion in deposits from the US banking system. Moynihan cited research referenced by the US Treasury Department indicating that a significant amount of bank deposits could shift to stablecoins due to such products. He stated that the operation of these products would be more similar to money market mutual funds, with funds being held in cash, central bank reserves, or short-term government bonds, rather than being used for lending. He believes that this deposit migration could lead to a contraction in bank deposits, weakening the ability to supply credit, particularly impacting small and medium-sized enterprises that rely more on bank loans than capital markets, and potentially raising overall borrowing costs.
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Link: Bank of America CEO Warns: Interest-Bearing Stablecoins Could Drain Up to $6 Trillion in Deposits from US Banking System [Copy]
