Bank of America Eyes Stablecoin Launch Pending Regulatory Approval

As stablecoins continue to gain prominence in the financial and cryptocurrency sectors, major institutions are positioning themselves to take advantage of emerging opportunities. Bank of America CEO Brian Moynihan recently signaled that the bank could enter the stablecoin market if US regulations provide clear guidelines, while cryptocurrency exchange MEXC has invested $36 million in Ethena’s synthetic dollar protocol, USDe. 

Bank of America CEO Signals Potential Stablecoin Launch Amid Regulatory Developments

Bank of America (BoA) may soon enter the stablecoin market if comprehensive legislation paves the way for its involvement, according to CEO Brian Moynihan. Speaking at the Economic Club of Washington, D.C., Moynihan suggested that BoA could issue a dollar-backed stablecoin linked to customer deposit accounts if regulators greenlight such a move.

While the CEO refrained from revealing specific details about BoA’s potential stablecoin products, his remarks indicate that stablecoins are increasingly being viewed as a strategic asset for banks aiming to modernize cross-border payments and settlements.

The prospect of a Bank of America stablecoin comes amid expectations that stablecoins will flourish under a second Donald Trump administration, with the president expected to push for regulatory clarity and bring stablecoin issuers onshore.

Stablecoins—digital tokens pegged to traditional fiat currencies like the US dollar—have been heralded as a tool for enhancing financial efficiency, particularly in international trade. Experts believe that an overcollateralized dollar-pegged stablecoin issued by a major US bank could further strengthen the dominance of the US dollar in global markets.

Recent legislative efforts in the US have focused on establishing clear regulations for stablecoins, ensuring they operate under robust financial oversight. This could provide traditional banks like BoA with a legal framework to launch their own stablecoins without regulatory uncertainty.

Moynihan’s comments come as stablecoin legislation takes center stage in Washington. Multiple bills have been proposed to formalize the role of stablecoins in the financial system, including:

• The Lummis-Gillibrand Payment Stablecoin Act

• The Clarity for Payment Stablecoins Act of 2024

• The GENIUS Stablecoin Bill

• The STABLE Act of 2025 (which seeks to study and develop a comprehensive policy for stablecoins)

In February 2025, Rep. Maxine Waters, ranking member of the US House Financial Services Committee, called for bipartisan support for stablecoin regulation. Waters emphasized that a bill drafted by former Chairman Patrick McHenry in 2024 provided a strong foundation for new legislation.

One of the key provisions in the Clarity for Payment Stablecoins Act of 2024, introduced by Senator Bill Hagerty, is allowing stablecoin issuers with less than $10 billion in market capitalization to be regulated at the state level rather than the federal level. This approach is expected to reduce regulatory burdens on smaller firms while still maintaining oversight.

The Federal Reserve and Banks’ Role in Stablecoin Issuance

The growing discussion around stablecoins has also drawn the attention of Federal Reserve officials, including Governor Christopher Waller, who voiced his support for banks issuing regulated stablecoins.

Waller described stablecoins as a chance to overhaul cross-border payments and international commerce — adding that banks and non-banking institutions should be allowed to issue regulated stablecoins.

With low-cost, near-instant settlement times, stablecoins offer a significant advantage over traditional banking mechanisms, which can take days or even weeks to settle international payments and involve high transaction fees. Financial experts believe that allowing US banks to issue stablecoins could improve liquidity, reduce settlement risks, and enhance the global appeal of the US dollar.

Bank of America’s potential entry into the stablecoin space is part of a broader trend where major banks are increasingly exploring digital assets. The combination of regulatory clarity and growing demand for digital dollar alternatives could create a new era of banking innovation.

While BoA has not yet confirmed specific plans for a stablecoin launch, its willingness to enter the market signals that the financial sector is taking stablecoins seriously—not just as a niche crypto product, but as a transformative force in banking.

If comprehensive legislation is passed, Bank of America may become one of the first major US banks to issue a stablecoin, setting a precedent for others to follow.

MEXC Invests $36 Million in Ethena to Accelerate Stablecoin Adoption

In a related development, cryptocurrency exchange MEXC has invested $36 million into Ethena’s USDe stablecoin and its developer, Ethena Labs. The investment, announced on Feb. 26, marks a strategic effort to bolster stablecoin development and adoption.

MEXC allocated $20 million directly to USDe, Ethena’s synthetic dollar-pegged asset, while $16 million was invested into Ethena Labs, the team behind the protocol. Additionally, MEXC is launching a $1-million reward pool to incentivize trading and staking activities related to USDe, aiming to further boost liquidity and user engagement.

With a circulating market capitalization of nearly $5.9 billion, USDe has quickly emerged as the third-largest stablecoin, following Tether’s USDT and Circle’s USDC.

MEXC’s investment comes at a time when synthetic stablecoins are gaining traction due to their unique structure and yield-bearing properties. Unlike traditional fiat-backed stablecoins, USDe employs a hedging strategy collateralized by cryptocurrencies, allowing it to offer a 9% yield to holders.

MEXC’s backing of USDe follows Ethena’s recent $100-million funding round, which saw participation from top-tier institutional investors, including Franklin Templeton. The fundraising, reportedly structured as a private sale of Ethena’s governance token (ENA), reflects growing institutional interest in stablecoin innovation.

Ethena Labs plans to use the new capital to expand its blockchain and token infrastructure to integrate more closely with the traditional finance industry.

This shift comes amid rising competition among stablecoin issuers to capture a larger share of the growing $220-billion stablecoin market.

Stablecoins have seen explosive growth over the past two years, surging by more than 73% since August 2023, according to data from Alphractal.

• Tether’s USDT remains the dominant player, boasting a market cap exceeding $140 billion and generating $13 billion in profits in 2024.

• Circle’s USDC is steadily increasing its market share, particularly among institutional clients.

• USDe is positioning itself as a high-yield alternative, drawing users seeking yield-bearing stablecoins as the demand for passive income opportunities rises.

The United States Securities and Exchange Commission (SEC) has recently approved the first yield-bearing stablecoin security, YLDS, issued by Figure Markets. This stablecoin will offer a 3.85% yield, significantly lower than USDe’s 9% APY.

The increased scrutiny on stablecoin yield mechanisms suggests that regulators are beginning to acknowledge their potential role in financial markets. However, concerns around decentralization, risk exposure, and compliance remain prevalent.

MEXC’s Expansion Strategy

MEXC has been increasingly positioning itself as a key player in stablecoin development, aiming to attract DeFi users seeking high-yield, on-chain alternatives to traditional banking products.

By investing in Ethena, the exchange not only strengthens its stablecoin offerings but also aligns itself with the future of decentralized finance.

With Tether, Circle, and now Ethena all competing for market dominance, the stablecoin wars are heating up. As institutional capital flows into the space, the sector is expected to evolve rapidly, with new products catering to different user demands—ranging from low-risk fiat-backed stablecoins to higher-yield synthetic alternatives.

MEXC’s investment in Ethena Labs signals that yield-bearing stablecoins are not just a passing trend, but a fundamental shift in the way digital assets are utilized in finance.