Moynihan explained that the potential shift of deposits outside traditional banks carries consequences for credit availability. He noted:
“When you think about that, that takes lending capacity out of the system. And that is the bigger concern that we’ve all expressed to Congress as they think about this.”
FAQ ⏰ Why is Bank of America concerned about stablecoin adoption?Stablecoins could move trillions in deposits out of banks, reducing lending capacity. How much money could leave banks for stablecoins? Studies cited by Brian Moynihan estimate up to $6 trillion in deposits could shift. How could stablecoins affect borrowing costs? Banks may turn to wholesale funding, which typically raises borrowing costs. Which borrowers face the biggest risk from deposit outflows? Small and medium-sized businesses that rely on bank lending could be most impacted.
