Bank of America CEO Brian Moynihan warned that up to $6 trillion, or roughly 30% to 35% of commercial bank deposits, could migrate into interest-bearing stablecoins, creating a direct challenge to bank funding and lending capacity. His central message was that yield-bearing stablecoins could become a meaningful competitor to traditional deposits.
The warning frames stablecoins as more than a payments tool, with the potential to behave like a yield product and a settlement layer at the same time. In that framing, on-chain dollars could reshape where liquidity sits and how it moves across the financial system.
Bank of America CEO on why stablecoins shouldn't pay interest:
(TLDR: consumers shouldn't earn yield so banks can)
Quick summary:
Interest on stables -> mass deposit flight
Fully reserved money -> no fractional leverage
Banks lose free funding -> profits go bye bye! https://t.co/WE5P7F6V48 pic.twitter.com/2ebBx82NE9— Omar (@TheOneandOmsy) January 15, 2026
Regulatory backdrop and market scale
The policy environment shifted after July 18, 2025, when a federal stablecoin law introduced strict reserve requirements, monthly reserve disclosures, and creditor-priority provisions. The law mandated 100% backing in liquid assets, but banks and industry groups argue that yield-like incentives could still emerge through third parties.
Against that backdrop, stablecoin supply in 2025 was described as being in the low hundreds of billions, with consultancy projections ranging into the low trillions by 2030 under base-case scenarios and higher in alternative forecasts. In parallel, tokenized deposits are projected by some institutions to reach tens of trillions in annual flows by 2030, creating a second digital-liquidity track that keeps bank-style protections while using blockchain rails.
Implications for banks and market infrastructure
Bank of America’s posture is notable because it has flagged systemic risk while also signaling development work on a bank-backed stablecoin and identifying Ethereum as a preferred rail. That combination suggests incumbents are preparing to compete on the same playing field they are warning about.
If yield-bearing stablecoins scale, day-to-day impacts would likely show up in heavier on-chain activity, shifting liquidity pools, and tighter operational expectations around reporting. More stablecoin-driven activity would mean more transactions and contract usage on the chosen network, while reserve disclosures and creditor-priority provisions raise the bar for provable accounting and custody coordination.
For node operators and infrastructure teams, the question is whether networks can handle sustained, large-value settlement without reliability trade-offs. If issuance and settlement concentrate on one execution chain, capacity, propagation performance, and node diversity become business-critical rather than academic concerns.
More broadly, the industry remains split on what the end state looks like, with some warning that deposit flight would erode lending and others arguing stablecoins and tokenized deposits can coexist with bank money. Either way, adoption metrics and further guidance on yield incentives and tokenized deposit issuance will determine whether on-chain liquidity becomes a dominant settlement plane or stays a regulated parallel rail.
