Bank of America is lobbying Congress to enact legislation that will benefit banks when deciding who can issue stablecoins. The $284 billion Global Systemically Important Bank (G-SIB) will seek to restrict the legal capabilities of non-banks to create stablecoins.
CEO Brian Moynihan this year has been collaborating with lobbying organizations such as the American Bankers Association and Bank Policy Institute, according to reports. He would like to release a fully reserved, 1:1 backed “Bank of America coin.” If the bank succeeds, it could restrict the stablecoin initiatives of non-banks such as Coinbase, Circle, Amazon, Meta, Tether, and numerous others.
Bank of America wants to compete with Circle, Tether
Of course, Circle is also engaging in its own lobbying activities. The firm’s largest stablecoin, USDC, boasts a $60 billion market cap that is second only to Tether’s $144 billion USDT.
As opposed to Tether, which has a recorded past of being a target of regulatory action, Bank of America lobbyists are arguing that it will always remain open and subject to US regulations.
Naturally, Bank of America has not been abiding by US laws at all times, such as underpaying for FDIC insurance, charging customers twice, breaking the Home Mortgage Disclosure Act, and a DoJ financial fraud suit which resulted in a fine of over $16 billion. Both the House and Senate are debating legislation that would control stablecoins. Senators, for instance, presented the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act. Representatives in the House presented the STABLE Act.
Neither bill rules out the fact that a US firm can issue a stablecoin whether or not it is a bank.
Bank of America clearly is seeking to have language regarding the bank’s special ability to do business or collateralize stablecoins inserted into any final bill presented to Donald Trump‘s desk for his signature. Bank of America also would like rule-making by US government agencies such as the US Federal Reserve and Treasury, and their bureaus to favor or even grant exclusivity to bank-run stablecoins.
