President Biden: US Banking is Safe
- Crypto users are concerned about the fate of the industry in the US.
- President Biden assured Americans that the government is working to protect banks and the economy.
- The collapse of Signature Bank and Silicon Valley Bank has created a void in the market for crypto-friendly banks.
Amidst fears of chaos within the US banking system, President Joe Biden has reassured Americans of the safety of the US banking system. Fears over the US economy were sparked by the collapse of crypto-friendly banks like Signature Bank and Silicon Valley Bank.
President Biden, reacting to the situation, said that the US will do “whatever is needed” to protect banks. His comments came after the United States guaranteed deposits at Signature Bank and Silicon Valley Bank. President Biden urged Americans to “rest assured that our banking system is safe.” The US is reportedly attempting to restrict customers from moving money out of banks since SVB fell as a result of an influx of withdrawals.
Who Will Bank Crypto Companies?
Some crypto experts believe that the loss of two significant crypto-friendly banks in less than a week could make it more difficult for crypto startups to collaborate with traditional banking institutions. Signature Bank and Silicon Valley Bank were considered to be key financial pillars for the crypto sector. Insurance records show that as of December 31, Signature Bank had $88.6 billion in deposits.
Crypto investor Scott Melker took to Twitter to express his concerns. He noted that “Silvergate, Silicon Valley, and Signature all shuttered. Depositors will be made whole, but there’s basically nobody left to bank crypto companies in the US.”
Meltem Demirors, Coinshare’s chief strategy officer, expressed similar fears on Twitter, noting that “crypto in America has been unbanked” in just one week. Demirors claimed that banks like Signature Bank “are the most challenging to replace.”
Despite the growing fears, some crypto users believe that the failures of the three prominent banks could create room for other banks to embrace crypto. The Blockchain Association’s head of policy, Jake Chervinsky, noted that the collapse of the banks would leave a “huge gap” in the market for crypto-friendly financial services. Jake wrote that “there are many banks that can seize this opportunity without taking on the same risks as these three. The question is whether banking regulators will try to stand in the way.”
Some others have claimed that there are already suitable banking alternatives available to replace the collapsed banks. Mike Bucella, general partner at BlockTower Capital, who spoke with CNBC, noted that some crypto companies have already switched to Mercury Bank and Axos Bank. But most agree that crypto faces an uncertain future in the United States.
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