The CEO of Bank of America, Brian Moynihan, recently issued a strong warning about the traditional financial system in the United States. Moynihan claimed that a mass migration to stablecoins could withdraw trillions of dollars from commercial banks. This statement comes during the entity’s latest earnings call, highlighting the tension between lenders and digital assets.
According to the bank’s estimates, nearly 6 trillion dollars could leave traditional bank accounts very soon. This figure represents approximately 35% of all commercial deposits in the United States. Likewise, the capital exodus would affect banking liquidity in a drastic way. On the other hand, the banking sector warns about the loss of funds for mortgage lending.
Moynihan based his projections on recent studies conducted by the national Treasury Department. The executive linked this risk directly to the legislative debate over interest payments on digital assets. Therefore, current issuance models resemble mutual funds of the money market. Also, money would stop circulating as direct credit for families and businesses.
Regulatory impact and the future of the commercial banking system
In addition, the Senate Banking Committee is working intensely on a bill to structure the market. The draft presented on January 9 by Tim Scott seeks to prohibit passive yields on these assets. In this way, Congress is trying to stop capital flight toward the tech sector. However, the proposal allows rewards for active participation in decentralized governance networks.
Nevertheless, industry support has fractured due to the proposed performance restrictions. Coinbase CEO Brian Armstrong publicly rejected the bill, considering it to be too restrictive. Therefore, exchange platforms defend the benefits for their current users. On the other hand, the Treasury’s surveillance over digital transactions generates privacy concerns.
Can the US Congress balance innovation with financial stability?
Due to the lack of consensus, the committee decided to postpone the final vote on this regulation. Negotiations remain active while cryptocurrency firms lobby for much more favorable conditions. Therefore, the future of regulation remains uncertain for institutional investors. Also, the banking sector demands protection against competition from technology companies.
In conclusion, the legislative landscape in Washington will determine the flow of capital over the next decade. If users prefer digital transparency, banks must adapt their business models very quickly. On the other hand, the stability of national credit is at stake in this structural shift. In this way, the market awaits a definitive legal framework to operate safely.
