For the past few months, the financial industry has been in extreme upheaval. The Silicon Valley Bank’s bankruptcy and subsequent closure by US regulators acted as the spark for the event. After that time, things went downhill fast at Signature Bank, too. The failure of Silicon Valley Bank had ramifications for Zurich-based lender Credit Suisse. Credit Suisse’s stock touched a new low during the first session of trading on the Swiss stock exchange.
The CEO of Circle, Jeremy Allaire recently acknowledged the irony of a regular bank shaking up the larger crypto market. In a recent interview with CNBC, Allaire told while talking about the recent crash mentioned that there is the most solid infrastructure possible for USDC, and it’s somewhat ironic that there has been a lot of talk of protecting the banking system from crypto, here the situation is such that a digital dollar needs protection from the banking system.
Notwithstanding the Federal Reserve and the US government’s $25 billion funding program to assist banks like SVB that were suffering liquidity concerns, Circle’s situation was exceedingly uncommon in Jeremy Allaire’s opinion.
Analyzing what has happened recently and what might happen as a result of SVB’s demise and, to a lesser extent, the failure of the smaller Signature Bank of New York, reveals a wide range of viewpoints. While some claim the worst of the crisis is behind, others argue that it has just served to highlight underlying problems.
Bill Ackman, the founder of Pershing Square, predicts that more banks will fail despite US government intervention to restore trust in the financial system in the wake of Silicon Valley Bank’s failure.
Sunday, in the wake of Silicon Valley Bank’s collapse, the Treasury Department, the Federal Reserve, and the Federal Deposit Insurance Corporation acted swiftly to ease fears about the health of the American financial system. They guaranteed the safety of all depositor funds and said that banks having trouble maintaining sufficient cash reserves would be eligible for more lenient terms on short-term lending.