Bank of America aims to dethrone Tether, Circle
Bank of America is making moves in Washington, lobbying Congress to pass legislation that would put banks in the driver’s seat when it comes to issuing stablecoins.
This financial giant, a $284 billion Global Systemically Important Bank (G-SIB), is aiming to limit the legal avenues for non-bank companies to create these digital currencies.
According to reports from The Block, CEO Brian Moynihan has been actively working with lobbying groups like the American Bankers Association and Bank Policy Institute throughout this year. His ambition? To launch a fully reserved, 1:1 backed stablecoin – potentially branded as “Bank of America coin.”
If Bank of America gets its way, this could seriously restrict the stablecoin ambitions of major non-bank players like Coinbase, Circle, Amazon, Meta, Tether, and many others.
Read more: PayPal and Ripple stablecoins still sub-1% despite ‘stablecoin gold rush’
Bank of America wants to compete with Circle, Tether
Of course, Circle isn’t sitting idly by. They’re also engaged in their own lobbying efforts. Their primary stablecoin, USDC, boasts a hefty $60 billion market cap, second only to Tether’s massive $144 billion USDT.
In contrast to Tether, which has faced considerable regulatory scrutiny, Bank of America lobbyists are arguing that they will always maintain transparency and operate in full compliance with US laws.
However, it’s worth remembering that Bank of America’s compliance history isn’t flawless. They’ve been caught underpaying FDIC insurance, double-charging customers, violating the Home Mortgage Disclosure Act, and even faced a Department of Justice financial fraud case that resulted in penalties exceeding $16 billion.
Right now, both the Senate and the House are considering bills aimed at regulating stablecoins. For example, Senators have introduced the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, while Representatives have put forward the STABLE Act.
Neither of these proposed bills currently prevents a US-based company from issuing a stablecoin, regardless of whether they are a bank or not.
Bank of America is clearly hoping to influence any final legislation, aiming to insert language that highlights banks’ perceived unique capabilities in operating and collateralizing stablecoins, ultimately targeting a bill that President Trump could sign into law.
Moreover, Bank of America would prefer that US government bodies like the Federal Reserve and Treasury, along with their associated bureaus, establish regulations that give preference, or even exclusive rights, to stablecoins operated by banks.
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