⚠ Stablecoins and the Next Place to GoModerate threat

Bank of America (BAC) — threat to the moat

Bank of America now names stablecoins as a place its cheapest deposits could go, and those deposits need no branch or charter to be taken.

Rate-seeking depositors took money from checking to savings to money funds. The bank's latest annual report adds a new destination: it warns of clients "moving balances into digital assets" or other alternative non-bank financial platforms1.

Average deposits by type, 2025 ($bn)1,470Interest-bearing514Noninterest-bearingBank of America Form 10-K FY2025, average balance table
A quarter of the money pays nothing, and that quarter is the target.

A stablecoin that pays its holder a return, or a platform that makes one easy to spend, competes directly with the noninterest-bearing account, which is the most profitable deposit a bank holds. Bank of America had $514,477 million of them on average in 20252.

The bank also says it increasingly competes with nonfinancial companies, including firms using emerging technologies such as digital assets3. That is a different competitor from another bank, because it does not need a charter, branches or capital requirements to hold a customer's spending money.

The bank's own digital franchise is the defence. Its customers made 4.4 billion digital logins in the second quarter of 2026, up 7%4. A customer already managing money in the bank's app every few days has less reason to open a separate wallet for everyday spending.

No outflow of this kind is visible yet: noninterest-bearing balances grew $19 billion in the second quarter of 20265. The warning is about direction. A quarter in which free balances fell while market rates were stable would be the first sign that the leak had found a new route.

References
  1. ReportedThe bank's latest annual report adds a new destination: it warns of clients "moving balances into digital assets" or other alternative non-bank financial platforms.
    Bank of America Form 10-K for fiscal 2025 - Item 1A risk factors and competition. — FY2025 · publ. 25 February 2026 · source ↗
  2. ReportedBank of America had $514,477 million of them on average in 2025.
    Bank of America Form 10-K for fiscal 2025 - financial highlights, income statement, capital and shareholders' equity. — FY2025 · publ. 25 February 2026 · source ↗
  3. ReportedThe bank also says it increasingly competes with nonfinancial companies, including firms using emerging technologies such as digital assets.
    Bank of America Form 10-K for fiscal 2025 - Item 1A risk factors and competition. — FY2025 · publ. 25 February 2026 · source ↗
  4. ReportedIts customers made 4.4 billion digital logins in the second quarter of 2026, up 7%.
    Bank of America second-quarter 2026 earnings release, Form 8-K exhibit 99.1 - consumer and digital highlights: checking accounts, Zelle, Erica, BofA Rewards, financial centers. — Q2 2026 · publ. 14 July 2026 · source ↗
  5. ReportedNo outflow of this kind is visible yet: noninterest-bearing balances grew $19 billion in the second quarter of 2026.
    Bank of America second-quarter 2026 earnings call transcript. — Q2 2026 · publ. 14 July 2026 · source ↗
Sources
Generated September 25, 2026