What the Fall of Crypto-Friendly Banks Means for the Market
- Date:April 04, 2023
- Author(s):
- James Wester
- Joel Hugentobler
- Report Details: 7 pages, 1 graphics
- Research Topic(s):
- Digital Assets & Crypto
- PAID CONTENT
Overview
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
Interested In This Report
Related content
The Limits of Crypto and the Rise of Layer 2s
Truly decentralized blockchains attract participation that provides worldwide transparency and reinforces why they were developed in the first place. But blockchain networks also h...
Building a Better Stablecoin
Unlike digital dollars, each stablecoin is unique when they are cryptographically minted and stored on a distributed ledger. Features such as programmability and near instantaneous...
Bitcoin Mining and ESG: The States Start Moving
New York was the first state to impose restrictions on bitcoin mining, but it won’t be the last. Oregon and Washington are lining up their own legislation, highlighting the industr...
Make informed decisions in a digital financial world