Key takeout
Bank of America plans to issue Stablecoin once regulatory clarity is available. The proposed stablecoin is fully supported and resembles existing financial products.
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Bank of America said it is ready to launch its own Stablecoin if a regulatory framework is permitted, CEO Brian Moynihan said in an interview with David Rubenstein at the Washington economic club on Tuesday.
“It’s clear that there are stable coins that are fully supported by the dollar,” Moynihan said when asked if he thought physical cash in favour of a completely digital economy would be completely eliminated.
“If they make that legal, we’ll enter the business,” Moynihan said. “We have bank of America coins and US dollar deposits and we can go back and forth between them.”
“It wasn’t legal for us to do that now,” he added.
Moynihan also outlined three different categories of Digital Asset Space: Blockchain Technology, Stablecoins, Bitcoin and other crypto assets. His focus was on stubcoins, stating that these assets work similarly to existing financial instruments.
“There’s no difference from a money market fund with check access…it’s no difference from a bank account,” he said.
Moynihan said that most of the money movement is already digital, especially in large transactions between central banks, such as wire transfers, ACH payments and other electronic methods.
According to BOFA CEO, credit and debit cards further strengthen the shift towards the digital economy. He noted that consumer spending is very digital as Zelle, credit cards and other digital payment methods outweigh cash transactions primarily.
Despite digital control, cash remains “very important,” Moynihan said. Cash usage is declining, but ATMs and branches are needed for consumers and small businesses who are still using cash.
The bank is currently handling a significant digital money movement, with Moynihan saying that it will “move $3 trillion digitally today.” He added that physical currency remains important, but that 98% of bills have moved globally will be processed by banks as a government service.
Regarding physical currency logistics, Moynihan explains “a few hundred dollars weighing several tons” and “a few hundred dollars weighing a million dollars in a stack of 25 feet,” highlighting the real benefits of digital alternatives.
BOFA CEO expects strong US banks to enter Crypto payments with clear regulations
Last month, Moynihan said US banks are ready to adopt crypto payments if a regulatory framework is established, focusing on secure, non-anonymous transactions. He also said that banks already process most transactions digitally.
“If the rules come in and it turns out that you can actually do business, then you know that the banking system will reach it hard on that trading side,” he pointed out.
Moynihan saw Crypto as another potential payment method along with the traditional system, saying the bank has a large number of blockchain patents.
The broader adoption of crypto by banks is hampered by regulatory uncertainty, which could change with the Trump administration’s pro-crypto stance.
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