Moynihan warns: stablecoins could siphon trillions from bank deposits

Recent comments by Brian Moynihan, CEO of Bank of America, have reignited the debate over the ability of stablecoins to destabilize the traditional banking system. During an investor conference, Moynihan expressed concrete concerns about a potential massive outflow of capital from banks to dollar-pegged digital tokens. Although the executive assured that his institution will adapt to this scenario, he issued a significant warning to Congress: the migration of trillions of deposits could erode the foundations of traditional credit.

Bank of America CEO’s Warning on Regulatory Structure

Brian Moynihan outlined a concerning scenario during the presentation of Q4 2025 results. According to the CEO, up to 6 trillion dollars in deposits could shift toward stablecoins and related instruments offering returns comparable to traditional investments. This phenomenon would represent a drastic reduction in the funding base on which banks build their lending activities. Moynihan did not rule out that Bank of America will continue to meet customer demand “whatever may emerge,” but highlighted that this is not his primary concern.

The alarm raised by Moynihan reflects the official positions of the American Bankers Association (ABA), which represents over 100 community financial institutions. The association recently urged the U.S. Senate to close what it calls “dangerous regulatory gaps” in stablecoin legislation. In a communication dated January 5, the ABA denounced how stablecoin issuers are finding increasingly sophisticated ways to offer incentives similar to interest rates, despite statutory bans on direct payments.

Trillions of Deposits at Risk: The Migration Mechanism

The underlying concern in Moynihan’s comments is easily understandable: deposits are not just a collection of funds but the fundamental infrastructure of the credit system. When depositors withdraw money from banks to purchase stablecoins or related products, the lending capacity decreases proportionally. This compression of financing forces banks to rely more on wholesale funding, a procurement mechanism that involves significantly higher costs.

Bank of America closed 2025 with 2 trillion dollars in deposits. Even just a fraction of this liquidity, if migrated to blockchains, would represent a considerable loss. The ripple effect would be predictable: higher funding costs would translate into higher interest rates on loans, primarily harming small and medium-sized enterprises that depend on bank credit for their operations.

The GENIUS Act and Ongoing Legislative Debates

The GENIUS Act, introduced last year, represents the federal attempt to establish a regulatory framework for stablecoin issuers. However, the banking sector has argued that the legislation does not provide sufficient safeguards to prevent stablecoins from operating as effective substitutes for interest-bearing traditional deposits. Although the Senate has discussed legislative changes to the cryptocurrency market structure in recent weeks, progress has stalled after Coinbase withdrew support, signaling internal divisions even within the crypto sector.

Banks are calling for stricter regulatory measures, specifically aimed at preventing stablecoin issuers from creating products that replicate the features of interest-paying deposit accounts. Brian Moynihan explicitly stated that he has expressed this concern to Congress, calling it the most urgent issue for the entire traditional financial sector.

The Divide in the Banking Sector: Diverging Views on Risk

Not all financial giants share the level of alarm expressed by Moynihan and the ABA. JPMorgan, directly asked about the possibility that stablecoins pose a systemic risk, minimized the threat. A bank spokesperson told CoinDesk that “there have always been different levels of money in circulation, including that managed by central banks and institutional and commercial money.” According to the bank, this multi-tiered structure will not fundamentally change; rather, different use cases for deposit tokens and stablecoins are simply emerging alongside traditional payment methods.

This disagreement reflects a broader rift within the banking industry regarding the actual implications of stablecoins. While community banks and Bank of America raise specific alarms about deposit loss, the megabanks adopt a more reassuring tone, suggesting that the financial system has always absorbed parallel innovations.

Future Implications and Brian Moynihan’s Role

Upcoming legislative developments will determine whether Moynihan’s alarms prove to be justified or overly cautious. The position of Bank of America’s CEO remains central in the regulatory debate, given the institution’s influence and the credibility of the executive within the U.S. financial ecosystem. If Congress fails to adopt sufficient preventive measures, the outflow of capital could indeed destabilize the traditional funding system, with tangible consequences for anyone relying on bank loans. However, if the threat turns out to be less severe than predicted, as JPMorgan suggests, the system might absorb it without major trauma, simply redefining its balances in the new landscape of digital resources.