TL;DR
- Moynihan says Treasury studies show up to $6T, or 30% to 35% of U.S. bank deposits, could shift to yield-paying stablecoins.
- FDIC averages show savings at 0.39% versus 3.89% Treasuries; the Senate draft bans interest for idle balances but allows action-based rewards.
- He warns reserves held in deposits, central bank accounts, or short-term Treasuries cut lending, and the bill sparked Galaxy and Coinbase criticism.
Bank of America CEO Brian Moynihan is warning Washington that stablecoin yield could trigger a deposit stampede. Citing Treasury Department studies, he said as much as $6 trillion could migrate from banks into stablecoin vehicles if issuers are pushed to pay interest, roughly 30% to 35% of U.S. commercial bank deposits. His message is simple: if deposits leave, lending capacity shrinks, and the broader economy pays the spread. Moynihan added that his bank would adapt, but he framed the systemwide impact as a liquidity crunch that could raise borrowing costs, especially for smaller borrowers.
Bank of America CEO on why stablecoins shouldn't pay interest:
(TLDR: consumers shouldn't earn yield so banks can)
Quick summary:
Interest on stables -> mass deposit flight
Fully reserved money -> no fractional leverage
Banks lose free funding -> profits go bye bye! https://t.co/WE5P7F6V48 pic.twitter.com/2ebBx82NE9— Omar (@TheOneandOmsy) January 15, 2026
Banks, lawmakers, and the yield line
The fight sits inside a familiar banking math problem: deposits pay little, but cash earns more elsewhere. FDIC data shows average savings around 0.39%, checking near 0.07%, and money markets about 0.58%, while Treasury yields were roughly 3.89% in mid-December. That 3.82-point spread underwrites bank profitability, so stablecoin yield feels like a direct attack on the margin. In the Senate Banking Committee draft, companies are barred from paying interest for simply holding stablecoin balances, but may offer rewards tied to actions like transactions, staking, liquidity, collateral, or governance.
Moynihan says lawmakers should think of stablecoins as a money market mutual fund concept, where reserves are limited to deposits, central bank accounts, or short-term Treasuries. In that setup, he argues, balances sit outside traditional intermediation and are not deployed into lending. The consequence, in his view, is that every dollar that exits deposits reduces the material banks use to make loans. He warned the hit would land hardest on small and medium-sized businesses, and that banks would either lend less or replace deposits with wholesale funding that comes at a higher cost.
Negotiations are messy. A market-structure draft released Jan. 9 by Chair Tim Scott drew lobbying and more than 70 amendments, and the committee markup was postponed. Senate Agriculture Chair John Boozman said progress was meaningful but more time is needed. Democrats have pushed for ethics provisions after a report estimated President Donald Trump generated $620 million from crypto ventures. With the schedule slipping, stablecoin yields have become a proxy fight over rewards, oversight, and political risk. Galaxy Research warned of new Treasury powers, and Coinbase’s CEO said the draft would kill stablecoin rewards.
