- Bank of America is lobbying Congress for legislation that would give banks preference in stablecoin issuance.
- CEO Brian Moynihan is working with banking industry groups to develop a “Bank of America coin” that would be fully reserved and backed 1:1.
- If successful, these efforts could restrict stablecoin operations from non-bank entities like Coinbase, Circle, Tether, and tech companies.
Bank of America has launched a lobbying campaign aimed at influencing Congress to pass legislation that would give traditional banks an advantage in the stablecoin market. The financial giant, valued at $284 billion and classified as a Global Systemically Important Bank (G-SIB), is specifically targeting regulations that would limit non-banking institutions’ ability to create and issue stablecoins.
CEO Brian Moynihan has been actively collaborating with industry advocacy groups including the American Bankers Association and Bank Policy Institute throughout 2024, according to reporting from The Block. The bank’s ambition is to develop and issue a fully reserved stablecoin backed 1:1 with assets, tentatively called “Bank of America coin.”
If successful, the bank’s lobbying efforts could significantly restrict stablecoin operations from companies outside the traditional banking sector, including Coinbase, Circle, Amazon, Meta, Tether, and numerous other crypto and tech firms currently developing or operating in the stablecoin space.
Banking Giants vs. Crypto Natives
Circle, the company behind USDC, is conducting its own counter-lobbying efforts. With a market capitalization of $60 billion, USDC stands as the second-largest stablecoin behind Tether’s USDT, which holds $144 billion in market cap.
Bank of America’s lobbying strategy centers on positioning itself as more reliable and compliant with regulations compared to companies like Tether, which has faced regulatory scrutiny in the past. However, critics note that Bank of America itself has a complicated compliance history, including a $16 billion penalty from the Department of Justice for financial fraud, underpayment of FDIC insurance, double-charging customers, and violations of the Home Mortgage Disclosure Act.
Legislative Landscape for Stablecoins
Both chambers of Congress are currently considering stablecoin regulation bills. In the Senate, lawmakers have introduced the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, while House representatives have put forward the STABLE Act. Currently, neither bill explicitly prevents non-bank entities from issuing stablecoins.
Bank of America is reportedly hoping to influence these bills to include language that would grant traditional banks exclusive or preferred status for stablecoin operations. Additionally, the bank seeks favorable rule-making from regulatory bodies including the Federal Reserve and Treasury Department that would prioritize bank-operated stablecoins over those issued by non-banking entities.
The outcome of this lobbying battle could significantly shape the future of the rapidly growing stablecoin market and determine which types of institutions will dominate this crucial bridge between traditional finance and cryptocurrency.
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