Armstrong: Banks Fight for Survival as $6T Deposit Flight Looms
Bank of America CEO Brian Moynihan admits $6T in deposits could flee to on-chain yields, validating Brian Armstrong’s claim of a regulatory “turf war.”
Coinbase CEO Brian Armstrong dropped the diplomatic veneer this morning, directly accusing major U.S. banks of sabotage. His claim? That traditional financial institutions are lobbying to kill stablecoin yields not out of concern for safety, but to prevent a $6 trillion capital flight that threatens their deposit-based business model.
The $6 Trillion Receipt
Armstrong’s offensive isn’t just rhetoric; the numbers come straight from the opposition. Bank of America CEO Brian Moynihan recently admitted on an earnings call that up to $6 trillion in deposits, roughly 30-35% of U.S. commercial bank deposits, could migrate to stablecoins if digital assets are allowed to offer yield.
The math is brutal for the banking sector. Traditional savings accounts currently offer near-zero returns (approx. 0.1%), while Treasuries-backed stablecoins can pass on yields of 4-5%. Moynihan was blunt about the mechanics:
“If you take out deposits, they’re either not going to be able to loan or they’re going to have to get wholesale funding, and that wholesale funding will come at a cost.”
Translation: If banks lose cheap customer deposits to on-chain competitors, their profit margins on lending collapse.
The "CLARITY" Weapon
The battlefield for this turf war is the proposed CLARITY Act. The draft legislation, currently circulating in the Senate Banking Committee, would explicitly ban "passive" yield on stablecoins, effectively forcing crypto issuers to operate with one hand tied behind their back.
Armstrong framed this as a direct attack on consumer value. "The banks are really coming and trying to undermine the president’s crypto agenda," he told Fox Business. "They’re trying to protect their own profit margins, taking money out of the pockets of hardworking, average Americans."
While Coinbase ($COIN) slid 0.4% on the news, the broader implication is a hardening of lines. The era of "collaboration" is over. Banks have identified stablecoins not as a niche asset, but as an existential solvent to their balance sheets.
