Bank of America CEO Brian Moynihan has joined the growing chorus of banking leaders warning that stablecoins—especially the versions that look and feel like interest-bearing cash—could siphon an eye-watering chunk of deposits out of the traditional banking system. In comments highlighted by ForkLog, Moynihan said as much as $6 trillion could flow from U.S. banks into stablecoins, roughly 30–35% of total deposits.
That’s not a crypto Twitter thought experiment. It’s a real policy battle now, because lawmakers are trying to decide whether stablecoin “rewards” are normal product features… or a backdoor way to recreate bank-like yield without bank-like supervision.
Why banks are so loud about stablecoins
Banks run on deposits. Deposits help fund loans to households and businesses—mortgages, small-business credit lines, car loans, the whole engine room of the economy. Moynihan’s point is straightforward: if deposits migrate to stablecoins, banks either lend less or replace that funding with more expensive alternatives.
As he put it, pulling deposits means banks “won’t be able to make loans” or they’ll need wholesale funding “and that funding will have its own cost.”
This is where the “stablecoin yield” argument gets spicy. The concern isn’t only that stablecoins exist—it’s that stablecoin issuers (or exchanges distributing stablecoins) can offer incentives that look like interest, encouraging people to park cash on-chain rather than in checking and savings accounts.
The “deposit flight” and the Treasury angle
ForkLog notes Moynihan’s estimate was tied to a U.S. Treasury-related study, and points to banking lobby research citing potential outflows even larger than BofA’s figure.
The Bank Policy Institute (BPI) explicitly referenced an April Treasury Department report estimating stablecoins could drive up to $6.6 trillion in deposit outflows, depending on whether stablecoins can offer yield or similar incentives.
Separately, a Treasury Borrowing Advisory Committee (TBAC) presentation laid out how stablecoin growth could pressure bank deposits and reshape demand for short-dated U.S. Treasuries—especially if stablecoins become more competitive versus deposits.
Why stablecoins point to Treasuries
One reason banks keep comparing stablecoins to money market funds: many stablecoin reserve models are heavily tied to T-bills, repo, and cash-like instruments, rather than being used to fund bank lending. The TBAC deck describes stablecoins as widely used “cash on-chain” and discusses how legislation could push reserves into very short-dated Treasuries.
Reuters has also flagged the Treasury-market angle: if stablecoin adoption accelerates, issuers could hold more U.S. government debt, potentially turning stablecoin firms into major T-bill buyers—but also creating new financial-stability questions if reserves ever need to be liquidated quickly.
The real fight
This is where Washington is trying to thread the needle.
According to ForkLog, the latest draft of the Digital Asset Market Clarity Act (CLARITY Act) would bar digital-asset providers from paying interest or income simply for holding a stablecoin, while still allowing rewards tied to “active participation” (think: liquidity provision, staking, governance, and other network activity).
Reuters similarly reported that the bill aims to prohibit interest for holding a stablecoin, but allows incentives for certain activities such as payments or loyalty-style programs—language that tries to separate “bank-like yield” from “product usage rewards.”
Why crypto companies are pushing back
From the crypto industry’s perspective, banning yield can look like lawmakers protecting banks from competition.
ForkLog reports that Coinbase pulled support for the updated draft, arguing it would restrict stablecoin rewards and raise broader concerns about DeFi and user rights. The Senate Banking Committee’s planned discussion was postponed after Coinbase CEO Brian Armstrong’s objections, according to Reuters—highlighting just how politically fragile the market-structure package is right now.
This is the core philosophical split:
- Banks’ argument: stablecoin yield creates a parallel deposit system without deposit insurance, supervision, or bank-style safeguards—raising risks during stress.
- Crypto’s argument: banning yield is anti-competitive and blocks consumers from earning more on digital dollars.
Stablecoins are bigger now, the stakes are bigger
This debate is happening as stablecoins keep scaling into mainstream payments and settlement plumbing.
DeFiLlama currently shows total stablecoin market cap around $309.6 billion, with USDT the dominant token. Reuters recently noted stablecoin circulation has surged, highlighting Tether’s USDT at roughly $187 billion and describing stablecoins as a way to move funds outside traditional banking systems—though merchant adoption is still limited.
And the “stablecoins are just for trading” narrative is getting weaker: Reuters reports Visa is actively integrating stablecoin settlement and seeing growth in stablecoin-linked cards, while more institutions explore stablecoin rails.
Conclusion
Moynihan’s “$6 trillion” warning is a political number with real economic weight behind it—because the stablecoin question is no longer “will people use digital dollars?” It’s “who gets to offer the benefits of money—yield, convenience, safety—and under what rules?”