USDT and the Banking Exodus: How Interest-Bearing Stablecoins Could Reshape Global Finance

In a striking testimony before the Senate Banking Committee, Bank of America CEO Brian Moynihan has sounded the alarm on a potential seismic shift in the global financial system. The catalyst? The rise of interest-bearing stablecoins, with assets like USDT at the forefront. Moynihan's warning centers on a provision within the latest market structure bill that seeks to restrict yields on these digital assets. He posits that without such regulation, the traditional banking sector could face a catastrophic drain of deposits, to the tune of an estimated $6 trillion, as savers chase higher returns in the crypto ecosystem. This isn't merely a competitive threat; it's a looming liquidity crisis. "We'll adapt, but the banking system WOULD face a liquidity crunch," Moynihan conceded, highlighting the systemic risk posed by the rapid migration of capital. This confrontation underscores a pivotal moment for digital finance. Stablecoins, initially designed as neutral settlement layers and volatility hedges, are evolving into yield-bearing instruments that directly challenge the core deposit-taking function of banks. For proponents of cryptocurrency, this represents the inevitable disintermediation of legacy finance—a more efficient market where capital flows freely to its most productive use. The banking sector's defensive posture, advocating for restrictive legislation, is a clear acknowledgment of this disruptive potential. As of early 2026, the battle lines are drawn not just over innovation, but over the very foundation of monetary storage and transmission. The outcome of this regulatory struggle will significantly influence whether stablecoins like USDT remain simple digital dollars or become the cornerstone of a new, decentralized financial architecture that redefines the concept of banking itself.

BofA CEO Warns Interest-Bearing Stablecoins Could Drain $6T from Banks

Bank of America CEO Brian Moynihan has issued a stark warning to lawmakers about the potential systemic risks of interest-bearing stablecoins. The Senate Banking Committee's latest market structure bill includes provisions to restrict stablecoin yields, which Moynihan argues could trigger massive deposit flight from traditional banks.

"We'll adapt, but the banking system would face a liquidity crunch," Moynihan conceded during his testimony. Treasury-commissioned research suggests up to $6 trillion could migrate from bank deposits to stablecoin vehicles if consumers chase higher yields outside the regulated system.

The threat comes as banks struggle with depressed deposit rates - averaging just 0.39% for savings accounts and 0.58% for money markets - while Treasury yields remain substantially higher. This widening gap has already pressured bank balance sheets, and stablecoin competition could exacerbate the strain.

Kazakh Blogger Faces International Warrant Over Illegal Gambling Promotion Using Tether

Kazakhstan's Financial Monitoring Agency (AFM) has issued an international arrest warrant for prominent blogger Kaisar Kamza Bakytzhanuly, known online as Qaisar Qamza. The influencer allegedly promoted illegal online gambling through his social media platforms, which included Instagram, Telegram, TikTok, and YouTube.

Authorities seized 182,700 USDT from the blogger, who received payments in the dollar-pegged stablecoin for advertising betting platforms. His activities included sharing promotional codes and direct links to gambling websites, violating local laws.

The case highlights growing regulatory scrutiny of cryptocurrency use in illicit activities across Central Asia. Stablecoins like Tether remain popular for cross-border transactions despite increasing enforcement actions.

Bank of America Flags $6 Trillion Deposit Risk From Yield-Bearing Stablecoins

Bank of America CEO Brian Moynihan issued a stark warning during the Q4 earnings call: yield-bearing stablecoins could siphon up to $6 trillion from U.S. bank deposits. Unlike traditional stablecoins (USDT, USDC), these instruments hold reserves in SAFE assets without lending them out—potentially raising borrowing costs for consumers and small businesses.

The banking sector is bracing for disruption. Moynihan conceded that deposit migration to stablecoins would force banks toward costlier funding mechanisms. Crypto advocates interpret this as validation of stablecoins' growing appeal, given their superior yields compared to near-zero interest savings accounts.

Lobbying efforts intensify as banking groups push Congress to regulate stablecoin yields under proposed frameworks like the GENIUS Act. The clash underscores a fundamental tension: decentralized finance’s efficiency versus traditional banking’s systemic role.