Fintechs embraced crypto long ago, then Wall Street asset management firms did the same by rolling out Bitcoin ETFs last year.
Now it’s the banks’ turn.
On Tuesday, Brian Moynihan, the CEO of Bank of America, said the increasing acceptance of stablecoins for payments is coming fast.
But there’s a catch — Congress will have to pass legislation establishing rules for their use, and President Donald Trump will have to sign it into law.
“It’s pretty clear there’s going to be a stablecoin,” Moynihan said in an interview at the Economic Club in Washington. “If they make that legal, we’ll go into that business.”
Watershed moment
The importance of this moment shouldn’t be underestimated.
Banks, by their nature, move glacially in adopting new innovative practices, especially technological ones involving the processing of payments.
So for Moynihan, who leads the second biggest US bank with $3.3 trillion in assets, to unambiguously embrace stablecoins is huge. It means other bank chieftains will probably follow suit.
Still, Moynihan, who has led BofA since 2010, cautioned that the exact role stablecoins may play in payments remains fuzzy.
“The question of what it’s going to be useful for is going to be interesting,” he said.
‘It’s going to be a new payment method.’
Chris Colson, Federal Reserve
The ball is now very much in lawmakers’ court.
A number of bills are under consideration on Capitol Hill, including the STABLE Act and the GENIUS Act, which would define the rules of the road for stablecoins.
Yet there’s still a long way to go before approved versions of the bills are sent to President Donald Trump for his signature, and the crypto industry is watching closely to make sure they don’t contain unwanted restrictions.
And bankers such as Moynihan are bound to be attuned to any potential events that might cast doubt on the integrity of these instruments, such as their use in money laundering and illicit finance.
Stablecoins, tokens that are pegged to the US dollar, have become by many measures the most useful instrument in crypto.
Myriad offerings
By letting users easily convert fiat currencies to crypto and vice versa, Tether’s USDT ($1.00) and Circle’s USDC ($1.00) are the lifeblood of the $3 trillion crypto market.
Now a bevy of traditional players are rolling out their own stablecoins as expectations rise they will be integrated into payments infrastructure. PayPal, MasterCard, and Robinhood are but a few of the companies that have developed their own offerings.
“It’s going to be a new payment method,” Chris Colson, the Federal Reserve Bank of Atlanta’s payments researcher told DL News this week.
Investment banks are also eyeing stablecoins.
In January, Morgan Stanley CEO Ted Pick told CNBC that the bank “will be working with Treasury, and the other regulators to figure out how we can offer [crypto] in a safe way.”
Meanwhile, Robin Vince, the CEO of BNY Mellon, which manages $2 trillion in assets, also said the blockchain industry has a lot of promise.
“Digital assets represent a new interesting, innovative technology, which we think could be important to the financial system over the next 10, 20 years,” said Vince.
Cross-border domination
All this buzz has stoked bullishness in the sector.
On Wednesday, Bitwise CIO Matt Hougan predicted stablecoins will “dominate” the cross-border payments system, which handled about $155 trillion in 2024, according to FTX ($0.00) Intelligence.
He highlighted “signposts” showing the rising momentum in the space, including Stripe’s $1.1 billion acquisition of stablecoin firm Bridge, PayPal’s introduction of its stablecoin PYUSD for 20,000 small and mid-size businesses. And, of course, Bank of America’s plan.
Still, Hougan tempered expectations.
“Prediction: TradFi stablecoins will find it harder than they think to win market share.”
Pedro Solimano is a markets correspondent based in Buenos Aires. Got a tip? Email him at [email protected].
