Bank of America Delays Stablecoin Plans Due to Regulatory Uncertainty

Bank of America's CEO, Brian Moynihan, has reiterated the bank's cautious stance on stablecoins, citing the lack of regulatory clarity and uncertain client demand as primary reasons for the delay. During the bank's earnings call, Moynihan emphasized that while the bank has conducted extensive research on stablecoins, the adoption of such digital assets would hinge on clear legal frameworks and demonstrated client interest.

Moynihan's comments contrast with his earlier statements from February, where he indicated that Bank of America would swiftly enter the stablecoin market if regulations permitted. He stated, "It’s pretty clear that there’s going to be a stablecoin, which is going to be fully dollar-backed. If they make that legal, we will go into that business." However, the current regulatory landscape remains unsettled, leading to a more conservative approach.

In contrast, other leading financial institutions are more proactive in exploring stablecoin initiatives. Citigroup's CEO, Jane Fraser, recently announced that the bank is actively investigating the issuance of a Citi-branded stablecoin for cross-border payments. This move aligns with a broader trend among Wall Street institutions, including JPMorgan and Wells Fargo, which have also shown interest in the stablecoin space.

JPMorgan's CEO, Jamie Dimon, who has been vocal about his skepticism towards cryptocurrencies, confirmed the bank's intention to engage with stablecoins, although specifics were not disclosed. Morgan Stanley's CFO, Sharon Yeshaya, also mentioned that the bank is closely monitoring developments in the stablecoin sector.

The regulatory environment for stablecoins and other cryptocurrencies remains uncertain, with ongoing Congressional gridlock over key crypto legislation. The House's "Crypto Week" faced setbacks due to Republican infighting, leading to the failure of a procedural vote to advance three crucial crypto bills. These bills included the GENIUS Act, aimed at establishing federal guardrails for stablecoins, the CLARITY Act, designed to provide a broader framework for crypto assets, and the Anti-CBDC Surveillance State Act, which seeks to prevent the creation of a central bank digital currency.

The House voted 196-223 against moving forward after 13 hardline Republicans rebelled, citing concerns over the GENIUS Act's failure to explicitly prohibit a U.S. CBDC. President Donald Trump intervened, attempting to persuade dissenters to back the bills. However, Rep. Marjorie Taylor Greene (R-GA) continued to oppose the package, arguing it did not adequately safeguard against government overreach into digital currencies.

By late Wednesday, the package appeared to be back on track, with Rep. Andy Harris (R-MD) announcing that members of the House Freedom Caucus had reached an agreement to advance the President’s crypto agenda. The deal included strong anti–Central Bank Digital Currency protections, a key sticking point for GOP holdouts. Another procedural vote is expected to take place.