Well, butter my biscuit and call me confused! The CEO of Bank of America, Brian Moynihan (yes, the same guy who probably still uses a flip phone), has issued a warning that sounds like a bad country song: trillions of dollars might up and leave bank deposits for the wild, wild west of stablecoins. Why? Because Congress is considering letting these digital darlings pay interest. 🤑🤠
Banking System Could Face $6 Trillion Problem (Or: The Great Deposit Exodus)
On a fateful Wednesday, Moynihan, with all the gravitas of a man who’s seen one too many spreadsheets, told investors that the banking industry might soon face a crisis bigger than a forgotten password on tax day. If Congress doesn’t slap a ban on interest-bearing stablecoins, up to $6 trillion-yes, trillion with a “T”-could flee the cozy confines of banks and head for the crypto hills. 🏃💨
During the Q4 earnings call (where the only thing more depressing than the numbers was the coffee), Moynihan cited Treasury Department studies, claiming that 30% to 35% of all U.S. commercial bank deposits could jump ship. And let’s be honest, banks are already having a hard enough time keeping up with Venmo and those “buy now, pay later” schemes. 😓
The banking sector has been throwing shade at the GENIUS Act (ironic name, much?) for months, claiming it’s got more loopholes than a crocheted sweater. The act prohibits interest payments on stablecoins but only addresses issuers, leaving everyone else to play by their own rules. It’s like a game of tag where no one’s “it.” 🤷♂️
Multiple banking associations (yes, they exist) sent a joint letter to the Senate Banking Committee, basically begging Congress to amend the law to include digital asset exchanges, brokers, and anyone else who might be sipping from the crypto Kool-Aid. 📝✉️
Moynihan, in a moment of rare candor, compared stablecoins to money market mutual funds, which require reserves in short-term instruments like U.S. Treasuries. This, he claims, would reduce lending capacity, leaving banks as useful as a screen door on a submarine. 🚪🌊
“That is the bigger concern that we’ve all expressed to Congress as they think about this, if you move it outside the system, you’ll reduce the lending capacity of banks. (…) And 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 and that wholesale funding will come at a cost that will increase the cost of borrowing.”
But fear not! Moynihan assured everyone that Bank of America would be just fine, because, you know, they’re Bank of America. Small- and medium-sized businesses, however? Not so much. They’ll be left holding the bag, or more accurately, the empty deposit slip. 🏦💔
Stablecoin Rewards Debate Intensifies (Or: The Crypto Circus Continues)
Moynihan’s remarks come as the Senate struggles with the market structure bill, a piece of legislation so controversial it makes family Thanksgiving dinners look harmonious. The latest draft, which was supposed to get a markup, has crypto industry leaders clutching their pearls and taking to social media to air their grievances. 📜🤬
Coinbase CEO Brian Armstrong, never one to mince words, took to X (formerly Twitter, because why not add more confusion?) to express his disappointment. “This version would be materially worse than the current status quo,” he said. “We’d rather have no bill than a bad bill.” Ouch. That’s like saying you’d rather eat plain tofu than a poorly cooked steak. 🥩🤢
Armstrong listed a litany of issues with the bill, including a de facto ban on tokenized equities, DeFi prohibitions, the erosion of the CFTC’s authority, and the stablecoin interest payment policies. Basically, it’s a regulatory dumpster fire. 🔥🚮
As reported by Bitcoinist, the bill introduces restrictions that would allow stablecoin issuers to offer rewards for specific actions (like opening an account or getting cashback) but prohibits interest payments to passive token holders. Armstrong called this a “kill shot” for stablecoin rewards, effectively letting banks ban their competition. It’s like bringing a knife to a gunfight, but the knife is made of rubber. 🔪🤡
Amid the backlash, Senate Banking Committee Chairman Tim Scott announced that the bill’s markup had been postponed. His reason? To “deliver clear rules of the road that protect consumers, strengthen our national security, and ensure the future of finance is built in the United States.” Translation: We need more time to figure out this mess. 🕑🇺🇸
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2026-01-16 11:15