Crypto Needs to ‘De-Risk’ From Unstable, Volatile Banks

The macro-financial landscape remains quite volatile due to the collapse of three well-known banks. As a result, investors and savers have embarked on a risk-off exercise. In fact, even staunch supporters of the cryptocurrency ecosystem have been advocating the same. Cardano founder Charles Hoskinson recently said in a similar tweet,

“Cryptocurrencies need to de-risk themselves from those unstable and volatile banks.”

Additionally, one user went on to highlight the need for a decentralized cryptocurrency bank at this stage. Stepping back, the Cardano founder claims that banks will be “game over” when treasury bills are digitized.

Also read: HSBC, Deutsche Bank, Santander ‘willing’ to cater to crypto customers

In fact, Cathie Wood also tweeted about the instability of the banking system and how cryptocurrency networks are not affected. An Ark Invest executive elaborated on this,

“While the U.S. banking system is in trouble as bank runs threaten regional banks, bitcoin, ethereum, and other cryptocurrency networks are not missing a beat. Instability in the banking system threatens stablecoins, the onramp to DeFi, which has nothing to do with regulation The rhetoric of the agency is in stark contrast.”

Cryptocurrencies and Regulations

Regulators were taking back-to-back enforcement actions against companies in the sector just before the banking crisis became a reality. Cathie Wood added that instead of hooking “decentralized, transparent, auditable and well-functioning financial platforms with no central point of failure,” regulators should focus on the “centralized and opaque financial platforms” that plague the traditional banking system. Point of failure”. She elaborated on this on Twitter:

Also read: Did Goldman Sachs’ $21.45B Txn Trigger Silicon Valley Bank’s Collapse?

Aside from the actions leading up to the banking crisis, it’s worth noting that the New York Department of Financial Services recently clarified that the decision to close Signature Bank “has nothing to do with cryptocurrencies.” In fact, the DFS spokesperson went on to assert that the agency has been promoting well-regulated cryptocurrency activity “for many years,” which is the “national model” for regulating the space.

While those from the field, such as Nic Carter, claimed that “DFS is covering their tracks,” claiming that the bank’s closure had nothing to do with cryptocurrencies, others took comfort in the agency’s assertion. Despite the current uncertainty, it is important to remember that when trust is shaken by centralized institutions, panic ensues and financial pillars begin to falter. Therefore, the path of transparency and decentralization will likely win in the end.

Also read: Silicon Valley Bank donates $73.4 million to Black Lives Matter and other movements

Source of information: Compiled from WATCHER by 0x Information.Copyright belongs to the author Lavina Daryanani, without permission, may not be reproduced

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