Bank of America CEO: Interest-bearing stablecoins could lead to a $6 trillion outflow of bank deposits
Svmuu News: Bank of America CEO Brian Moynihan stated during the quarterly earnings conference call that interest-bearing stablecoins could lead to a loss of $6 trillion in deposits from the banking system and harm the credit capacity of small and medium-sized enterprises.Citing data from a U.S. Treasury report, Brian Moynihan noted that the financial structure of stablecoins resembles that of money market mutual funds, with their reserves invested in low-risk securities such as short-term Treasury bills rather than being converted into bank loans. He believes that the widespread adoption of interest-bearing stablecoins would force banks to shift to higher-cost wholesale funding, thereby driving up overall borrowing costs.Currently, a draft cryptocurrency bill under discussion by the U.S. Senate Banking Committee proposes to prohibit idle stablecoins from earning interest. Coinbase CEO Brian Armstrong posted on X, stating that Coinbase. has officially withdrawn its support for the bill due to provisions that restrict stablecoin rewards, effectively ban tokenized stocks, and limit DeFi.Brian Armstrong accused the relevant amendments of aiming to eliminate competition faced by banks by eliminating stablecoin rewards. As a result, the Senate Banking Committee has postponed the vote originally scheduled for January 15.
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