Bank of America CEO Brian Moynihan has confirmed that the bank plans to enter the stablecoin market, should US regulations allow it.
Speaking at a Washington, D.C. event on Tuesday, Moynihan said that the bank is preparing to launch a USD-backed stablecoin in efforts to align with self-proclaimed ‘crypto president’ Donald Trump’s agendas after he called them out for being biased against his people just last month.
“It’s pretty clear there’s going to be a stablecoin,” Moynihan said, adding that Bank of America will likely offer a product tied to US dollar deposit accounts.
Bank of America, which is 18th in the Fortune 500, invests about $4 billion in new technology yearly, Moynihan said. And running the system requires another $8 or $9 billion annually, he said. “So the impact is unbelievable,” he said.
BofA offered a mobile banking app for iPhone before other banks, Moynihan said. “Back then it was an unusual thing to have an app,” he said. “Everybody went to the websites. So that took off. We now have 40 million consumers who bank digitally with us all the time.” About 90% of the bank’s interactions with customers last year were digital, he said. The company launched its AI-powered assistant Erica in 2018.
Moynihan also responded to former President Donald Trump’s recent criticism regarding political de-banking. At the World Economic Forum in Davos in January, Trump targeted major US banks like Bank of America, accusing them of de-banking conservatives.
Trump alleged that Bank of America, along with other banks, has been preventing certain conservative clients from using their services.
“We bank everybody,” Moynihan said. “But the real question was about over-regulation, frankly,” he said.
Moynihan pointed to interpretations of anti-money laundering, Bank Secrecy Act and know-your-customer regulations, and said that “there’s a lot of burden on the banking system” to report suspicious activity and analyze it.
Bank of America sometimes has “to close accounts and we can’t tell people why we did it,” which can create confusion, Moynihan said.
Moynihan weighs in on crypto debanking
Moynihand acknowledged that debanking has been an issue in the crypto industry, “where the regulators said you can’t bank crypto operating companies, employees of crypto companies, etc.,” Moynihan said. “The operating company, they said, ‘That’s a high-risk activity, ask us for authority.’ And guess what? You would have never gotten the authority.”
The issue was the focus of a Senate Banking Committee hearing in early February, where lawmakers (led by the crypto-loving Senator Cynthia Lummis) and witnesses agreed de-banking is an issue, but couldn’t decide whether bank regulation or the lenders themselves are to blame.
In any case, Trump’s public lash out “opened the dialogue about how to get these regulations correct,” Moynihan said. One potential reform, he mentioned later, would be raising BSA reporting requirements for cash transactions, from the current $10,000 threshold.
Earlier this month, during an investor conference appearance, Moynihan said he wanted balance and “the right regulation.” “Give us a rational regulatory structure, and have it stick to the ribs,” Moynihan said Tuesday.
Meanwhile, Vance Spencer, co-founder of Framework Ventures, said:
“I don’t comment directly on regulation much but I would like to flag an emerging regulatory battle that is happening in D.C. The soon-to-be revealed stablecoin markup apparently has requirements to shut off access to the treasury market to centralized international stablecoin issuers – which is straight up batshit crazy.”
Vance added that this is a blatant attempt at regulatory capture by U.S. players done at the expense of U.S. national interest, how does limiting access to hundreds of billions of dollars of demand for treasuries helps us preserve dollar hegemony across the globe, or fix our debt problem?
The largest stablecoins today are built overseas, and the largest source of demand is overseas, and this is not changing no matter what, said Vance. The net effect of a continued hostile regulatory stance towards stablecoins will only be to regulate ourselves out of the picture like Europe with AI.
Vance finished his post with: “The future of stablecoins can be U.S. dollar based only if we allow a broader competitive set of stablecoin issuers to flourish and deny gatekeeping/gaslighting by those interested in regulatory capture.”
Stablecoin regulations are coming
David Sacks, the new White House AI and crypto czar, is working with lawmakers on some possible new regulations, and one of the main things they’re going to be looking at is stablecoins.
Sacks talked about this in a CNBC interview on “Closing Bell Over Time” on Tuesday. He said, “They are very committed to moving legislation through the House and the Senate this year in order to provide that clear regulatory framework that the digital assets ecosystem needs to sustain innovation in the United States.” He also added, “Moving legislation through Congress takes time, but I think this is something we could do in the next six months.”
Earlier that day, Sacks joined some big names from the House and Senate committees for banking and finance. They held a press conference where they talked about their early goals for crypto policy, with help from the SEC. It was a busy day in Washington, with key figures from Capitol Hill and the White House—yep, Trump’s White House—setting out the next steps for their digital currency plans.
“I look forward to working with each of you in creating a golden age in digital assets,” Sacks said during the press event.
He was there with Senator Tim Scott (R-S.C.), who’s the chairman of the Senate Banking Committee, Representative French Hill (R-Ark.), who’s the chair of the House Financial Services Committee, and Senator John Boozman (R-Ark.), who leads the Senate Agriculture Committee.
The first thing they all said they’re prioritizing is the stablecoin bill introduced by Senator Bill Hagerty (R-Tenn.). He’s proposed new rules for stablecoins to create a “clear regulatory framework” around their use. Just to give you some context, stablecoins are a type of cryptocurrency that’s tied to a real-world asset, like the U.S. dollar.
Also, SEC Commissioner Hester Peirce, who’s now in charge of the agency’s newly created Crypto Task Force, wrote a statement titled “The Journey Begins.” She explained that the whole point of the task force is to set up more transparent and predictable regulations to get rid of legal confusion and avoid any unnecessary obstacles.
Peirce said, “The Task Force is working to help create a regulatory framework that both achieves the Commission’s important regulatory objectives — including protecting investors — and preserves the industry’s ability to offer products and services.”
The task force’s main priorities include figuring out which crypto assets fall under securities laws, making it easier for token issuers to get regulatory approval, and ensuring that compliance measures don’t hold back innovation. The group will also look at things like crypto lending, staking, exchange-traded products, and cross-border regulations. But Peirce made it clear that even though the SEC is all about fostering growth in the industry, they’re not going to put up with fraud.
The SEC also mentioned they’re actively asking for feedback from the public. Firms or individuals can submit written comments or even ask for meetings with the task force to give their input.
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