Bank of Americas Plan Could Shut Down Coinbase and Tether Stablecoins
The goal: prevent non-bank companies from freely issuing digital dollar-pegged tokens.
The $284 billion financial giant is working with industry groups like the American Bankers Association and the Bank Policy Institute, according to The Block. These efforts are part of a broader push to create a fully reserved, 1:1-backed Bank of America coin.
If successful, the campaign could sideline stablecoin projects led by non-bank players like Coinbase, Circle, Tether, Amazon, Meta, and PayPal.
The Stablecoin Power Struggle
Stablecoins like USDC (by Circle) and USDT (by Tether) dominate the market, with market caps of $60 billion and $144 billion, respectively. Bank of America wants inbut only under rules that favor traditional banks.
While Circle is lobbying to protect its own position, Bank of America argues that its offering would be more transparent and fully compliant with U.S. law. That narrative takes aim at competitors like Tether, which has faced regulatory scrutiny in the past.
However, Bank of Americas own history with regulators is far from clean. The bank has been fined for issues including underpaying FDIC insurance, double-charging customers, violating the Home Mortgage Disclosure Act, and a $16 billion DoJ settlement over financial fraud.
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