Key Takeaways
- Bank of America plans to issue a stablecoin once regulatory clarity is available.
- The proposed stablecoin would be fully dollar backed and resemble existing financial products.
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Bank of America stands ready to launch its own stablecoin if the regulatory framework allows, said CEO Brian Moynihan in an interview with David Rubenstein at the Economic Club of Washington on Tuesday.
“It’s pretty clear there’s going to be a stable coin which is going to be a fully dollar backed,” said Moynihan when asked whether he thought there would be a complete elimination of physical cash in favor of a fully digital economy.
“If they make that legal we’ll go into that business,” Moynihan said. “You’ll have a Bank of America coin and a US dollar deposit and we’ll be able to move them back and forth.”
“Because now it hasn’t been legal for us to do it,” he added.
Moynihan also outlined three distinct categories in the digital asset space: blockchain technology, stablecoins, and Bitcoin and other crypto assets. His focus was on stablecoins, stating that these assets would function similarly to existing financial products.
“It’s no different than a money market fund with check access…is no different than a bank account,” he said.
Moynihan said the vast majority of money movement is already digital, especially for large transactions between central banks, like wire transfers, ACH payments, and other electronic methods.
Credit and debit cards further reinforce the shift towards a digital economy, according to BofA CEO. He noted that consumer spending is heavily digital, with Zelle, credit cards, and other digital payment methods largely outpacing cash transactions.
Despite digital dominance, cash remains “critically important,” Moynihan stated. Although cash usage is declining, ATMs and branches are still needed for consumers and small businesses who still use cash.
The bank currently handles substantial digital money movement, with Moynihan noting they “move three trillion dollars today digitally.” He added that while physical currency remains important, 98% of bills moved globally are handled by the bank as a government service.
Regarding physical currency logistics, Moynihan explained that “a billion dollars of hundreds weighs a few tons” and “a million dollars of hundreds is a 25 foot stack,” highlighting the practical advantages of digital alternatives.
BofA CEO anticipates strong US bank entry into crypto payments with clear regulation
Last month, Moynihan said that US banks are ready to adopt crypto payments if regulatory frameworks are established, focusing on secure, non-anonymous transactions. He also mentioned that the bank already handles most transactions digitally.
“If the rules come in and make it a real thing that you can actually do business with, you will find the banking system will come in hard on the transactional side of it,” he noted.
Moynihan views crypto as another potential payment method alongside traditional systems and stated that the bank holds numerous blockchain patents.
The broader adoption of crypto by banks has been hindered by regulatory uncertainties, which could change with the Trump administration’s pro-crypto stance.
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