The US banking sector is on the verge of a major shift as Bank of America (BofA) CEO Brian Moynihan revealed that the institution is poised to enter the stablecoin market – contingent on favourable legislation from Congress.
Bank of America planning stablecoin launch
Moynihan’s remarks come amid growing political momentum in Washington to establish a legal framework for stablecoins, a move that could reshape the competitive landscape for digital assets and traditional finance alike.
Speaking at the Economic Club of Washington, Moynihan acknowledged that Bank of America would launch its own dollar-backed stablecoin if Congress provides the necessary legal clarity.
“If they make that legal, we will go into that business,” he stated, highlighting the potential for BofA to issue its own fully collateralized digital currency.
This development aligns with a broader policy push.
The Trump administration and congressional leaders, including Senate Banking Committee Chairman Tim Scott, have committed to passing the Genius Act – a bill designed to establish a regulatory framework for stablecoin issuers – within the first 100 days of the new administration.
With stablecoin transactions surpassing $33 trillion over the past year, exceeding Visa and Mastercard combined, major financial institutions are increasingly recognising their significance in global payments.
Wall Street Banks Eye Stablecoin Adoption
Bank of America’s interest in stablecoins reflects a broader trend among major financial institutions.
While J.P. Morgan and Citigroup have already launched blockchain-based payment initiatives, BofA has taken a more cautious approach to digital assets.
However, shifting regulations and the Trump administration’s pro-crypto stance may push traditional banks further into the space.
Moynihan likened stablecoins to money market funds and bank deposits, suggesting that BofA’s stablecoin could function as a seamless bridge between traditional deposits and digital currency transactions.
He added, “It’s pretty clear there’s going to be a stablecoin, which is going to be fully dollar-backed, so you’ll have a Bank of America coin and a US Dollar deposit, and we’ll be able to move them back and forth.”
Other financial firms are also ramping up their digital asset strategies.
Investment giant Charles Schwab recently hired a head of digital assets, signalling its intent to explore crypto-related offerings.
The competition among traditional banks and fintech firms is set to intensify as regulatory certainty increases.
Regulatory and Political Landscape
The regulatory path for stablecoins appears clearer than for other digital assets, given bipartisan support for establishing legal guardrails.
While Democrats have raised concerns over potential illicit use cases, the Republican-controlled Congress is expected to take a pro-business approach to legislation.
Lawmakers have reiterated the need for stablecoin issuers to maintain full US dollar reserves, ensuring stability and mitigating risks associated with algorithmic and partially-backed stablecoins.
The Trump administration’s crypto-friendly stance has given financial institutions the confidence to explore digital assets without the regulatory uncertainty that plagued the industry in recent years.
A Transformational Moment for US Banking
Bank of America’s potential entry into the stablecoin sector marks a significant milestone in the integration of blockchain technology within traditional banking.
If stablecoin legislation is enacted, BofA’s digital currency could enable faster, more cost-efficient cross-border transactions, enhance liquidity management and offer an alternative to existing payment rails like SWIFT.
With stablecoins now processing more transaction volume than Visa and Mastercard (In 2024, the total stablecoin transfer volume reached $27.6 trillion, surpassing the combined transaction volume of Visa and Mastercard by 7.68%), their role in the financial ecosystem is expanding rapidly.
As regulation takes shape, traditional banks will need to adapt quickly or risk losing ground to fintech disruptors already operating in the space.
Bank of America’s decision is not just about entering the stablecoin market – it’s about ensuring that legacy banks remain relevant in an era of digital transformation.
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