In the past six weeks, three major financial institutions with close connections to the crypto industry have ceased operations: Signature, Silvergate, and Silicon Valley Bank. The large growth of deposits on regional banks’ balance sheets initially suggested that banks were in a far superior position than they were in previous recessions or financial crises. However, the inflation boogeyman entered the equation, causing the Federal Reserve to enforce a counterattack-type monetary policy, ultimately leaving banks with large allocations of so-called “safe assets” at risk. That trend hit three crypto-friendly banks in quick succession.

The increasing complexities of global financial systems and technologies suggest that digital transfers of money, assets, or crypto are only just beginning, and financial institutions and technology providers must future-proof their financial operations and look for ways to add true value for their clients.

Companies Mentioned:

Alameda Research, Bank of International Settlements, Circle, First Citizens BancShares Inc, FTX, New York Division of Financial Services, New York Magazine, Signature Bank, Silicon Valley Bank, Silvergate Bank