According to ChainCatcher, U.S. Bank CEO Brian Moynihan has issued a warning that up to $6 trillion in deposits could move away from banks if Congress does not impose restrictions on interest-bearing stablecoins. This amount represents approximately 30% to 35% of total commercial bank deposits in the United States.
Moynihan explained that stablecoins are structured similarly to money market mutual funds, with reserves held in short-term instruments like U.S. Treasury securities, rather than being used for bank loans as in traditional banking. This model allows funds to operate outside the conventional banking system, potentially shrinking the deposit base that banks rely on to support loans for households and businesses. This issue is one of the most contentious aspects of the CLARITY Act, a proposed bill concerning crypto market structure.
The draft legislation includes a provision that prohibits digital asset service providers from paying interest or returns solely because users hold stablecoins. Notably, the bill differentiates rewards based on activities, allowing them to be linked to staking, providing liquidity, or offering collateral, while prohibiting rewards for idle balances in accounts.
