The $6 Trillion Nightmare Scenario
Bank of America CEO Brian Moynihan didn’t mince words during Wednesday’s earnings call. His warning was precise and quantified: up to $6 trillion in commercial bank deposits, roughly one-third of the U.S. total, could migrate to stablecoins if regulators allow issuers to pass yield on to holders.
Moynihan cited internal data and U.S. Treasury studies to paint a picture of a systemic drain. His argument centers on the “money market” classification of stablecoins. Unlike traditional banks, which leverage deposits to fund mortgages and small business loans, stablecoin issuers typically park reserves in short-term U.S. Treasurys to maintain their peg.
“If you take out deposits, they’re either not going to be able to loan or they’re going to have to get wholesale funding,” Moynihan noted, warning that this shift would inevitably spike borrowing costs for American businesses.
The Battle for Yield
This isn’t just theoretical forecasting; it’s active lobbying. Moynihan’s comments land precisely as the Senate Banking Committee debates the CLARITY Act, a piece of market structure legislation that has hit a wall over this exact issue.
The current draft proposes a ban on “passive yield” for stablecoins, effectively protecting the banking sector’s low-interest deposit monopoly. This provision triggered a sharp rebuke from Coinbase CEO Brian Armstrong, who pulled his support for the bill on the eve of the vote.
“We’d rather have no bill than a bad bill… banning stablecoin rewards protects banks from competition at the expense of consumers.” Brian Armstrong, Coinbase CEO
Market Reality vs. Banking Fear
The gap between today’s reality and Moynihan’s $6 trillion fear is massive. The current total stablecoin market cap sits at approximately $280 billion, dominated by Tether (USDT) and Circle (USDC). For Moynihan’s scenario to materialize, the sector would need to expand by roughly 20x—a growth trajectory that seems plausible only if stablecoins are legally permitted to offer 4-5% yields directly to retail holders, competing instantly with savings accounts.
Following the clash between banking lobbyists and crypto executives, Senate Banking Committee Chair Tim Scott has postponed the bill’s markup, leaving the regulatory status of yield-bearing digital dollars in limbo.
