Bank of America CEO: Interest-Bearing Stablecoins Could Take $6T Out of Bank Deposits

The CEO of Bank of America has issued a significant warning regarding the competitive threat posed by interest-bearing stablecoins, stating that these digital assets could potentially drain up to $6 trillion from the traditional banking system’s deposit base. This forecast highlights the growing risk of disintermediation as innovative decentralized finance (DeFi) products begin to offer higher, more accessible yields than traditional savings or money market accounts.

The core concern stems from the nature of bank funding. Traditional banks rely heavily on cheap, stable, and sticky deposits—especially non-interest-bearing checking accounts—to fund lending activities. Interest-bearing stablecoins, which peg their value to fiat currency but allow users to earn yield through various underlying mechanisms (such as staking or lending protocols), represent a superior alternative for users seeking immediate liquidity combined with passive income.

$6 trillion represents a substantial portion of the U.S. banking system’s total deposit base, suggesting that if stablecoin adoption matures and regulatory clarity increases, the flight of funds could profoundly impact banks’ cost of capital and overall profitability. The CEO emphasized that this development necessitates a swift response, likely involving increased regulatory scrutiny of yield-generating crypto products or forcing traditional financial institutions to drastically restructure their deposit offerings to remain competitive.

Source: Bank of America CEO: Interest-Bearing Stablecoins Could Take $6T Out of Bank Deposits