JP Morgan CEO Warns of Worsening Banking Crisis Due to Over-Regulation
Following the recent banking crisis, the industry has been under increased scrutiny. Regulators have introduced new rules and regulations to ensure that such a catastrophic event never happens again. The banking crisis instilled a great deal of fear and distrust in the banking industry.
However, the CEO of JPMorgan, one of the world’s largest banks, has called for a shift in focus. He has argued that the Federal Reserve should be less concerned with adding new rules and more focused on fixing the underlying issues that led to the crisis in the first place.
Proactive Measures Required
During a recent Bloomberg TV interview, JPMorgan Chase’s CEO and Chairman, Jamie Dimon expressed concerns over the possibility of further pain for US banks. He has emphasized that the situation will probably get worse if the Federal Reserve over-regulates businesses in response to crises.
Instead, proactive measures must be taken to address the issues in the banking sector. Dimon’s comments come as JPMorgan Chase recently took over the failed First Republic Bank.
According to Dimon, the current banking crisis is due to a lack of effective supervision. Bank CEOs and Board Members are solely to be blamed for the failure. The Fed tends to focus on ensuring compliance with regulations, but Dimon argues that they need to take a more comprehensive approach to address the underlying issues.
The Drawback Of Excessive Regulation
Dimon has addressed that there is already a 200,000-page stress test of the Federal Reserve and adding more to this is not the solution to prevent future banking crises. He has further pointed out that more regulations make it harder for banks to conduct business and could lead to a false sense of security.
Dimon seems to have apprehensions about the effectiveness of stress tests, stating that focusing solely on one stress test could overlook other issues. He suggests taking a different approach to addressing the underlying issues in the banking sector.
This is not the first time that JPMorgan executives have expressed concerns about banking regulations. Chief Investment Officer of J.P. Morgan Asset Management, Bob Michele, recently stated that First Republic Bank’s liquidity issues “should never have happened” as banking is the most regulated industry.
Is The Banking Turbulence Good For Pepe, Uniswap And Collateral Network?
Over the last month, activity throughout the cryptocurrency market grew exponentially as uncertainty increased throughout the banking market. With the First Republic on the brink of collapse, market experts believe that Pepe (PEPE), Uniswap (UNI) and Collateral Network (COLT) could surge in value. Here’s why.
Collateral Network Could Revolutionize A $7.4 Trillion Market
With more people moving towards DeFi technology, projects like Collateral Network are in a strong position to gain market share from traditional businesses. Collateral Network is designed to disrupt the crowdlending industry and has already experienced a 40% price rise during its presale.
Instead of needing to sell their physical assets to raise cash, Collateralnetwork.io lets borrowers take out a DeFi loan against their assets by bringing them on-chain as an NFT. Each NFT is fractionalized and sold directly to lenders on the platform, who earn a fixed interest rate for the duration of the loan.
This innovative approach can provide borrowers with access to cash in just 24 hours without impacting their credit scores. Additionally, due to fractionalization, lenders can lend an amount that suits their budget.
The platform is designed to be easy to use, with cross-chain compatibility and borderless transactions to make raising a loan easier than ever. COLT tokens are currently available at $0.014 a token, and are predicted to rise to $0.35 by the end of the project’s presale.
Uniswap Rises 1.43% In The First Week Of May
Uniswap (UNI), one of the world’s largest decentralized exchanges, has experienced an increase in its user base following recent turbulence with centralized banks. As investors in both fiat and cryptocurrency begin to doubt the security of their finances, it’s believed that platforms like Uniswap (UNI) will grow in popularity. However, Uniswap (UNI) itself performed poorly throughout April.
Over the last month, Uniswaps (UNI) value has decreased by 12.70%, taking Uniswap (UNI) to lows of $5.21. The project has since bounced back to $5.30 and is expected to rise over the next few weeks following its recent Gauntlet update. While its recent performance has been one of ups and downs, Uniswap (UNI) plays an integral role in the decentralized economy and is only going to grow as investors lose hope in centralized exchanges. As a result, additional banking turbulence could drive up the price of Uniswap (UNI), making it a strong long-term investment.
How High Will Pepe (PEPE) Go In May?
The Pepe (PEPE) meme has become one of the latest DeFi projects to make headlines. Its recent price increase of over 1000% shocked investors and analysts worldwide, and now Pepe (PEPE) continues to rise in value. Should Pepe (PEPE) follow financial trends in a similar way to Shiba Inu and Dogecoin, banking turbulence will almost definitely push its value up further.
Pepe (PEPE) has quickly grown a huge fanbase, with over 227,000 followers on Twitter alone. The project showcases hundreds of memes to create hype around the Pepe (PEPE) brand, which has pushed the value of Pepe (PEPE) up to $0.000001307 over the past week.
Pepe (PEPE) is trending on social media and platforms such as Coinmarketcap, with over $250 million worth of Pepe (PEPE) tokens being traded daily. Now ranked the third largest memecoin in the world, analysts are split as to whether or not the Pepe (PEPE) token will rise or fall over the next few weeks, though it could become one of 2023’s best investments.
Find out more about the Collateral Network presale here:
Website: https://www.collateralnetwork.io/
Presale: https://app.collateralnetwork.io/register
Telegram: https://t.me/collateralnwk
Twitter: https://twitter.com/Collateralnwk
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US Banking Crisis: PacWest Bank On The Brink Of Collapse As Bitcoin Steals The Spotlight
PacWest Bancorp, a California-based American bank, recently confirmed that it is considering various strategic options, including a potential sale, as its shares continue to tumble. Amid this turmoil, the rise in Bitcoin’s value has caught the attention of market observers, prompting speculation that a significant rally could be on the horizon.
PacWest’s Struggle for Stability
PacWest has disclosed that it has been approached by potential partners and investors while seeking ways to secure its financial future. The bank’s shares dropped by 50% in after-hours trading on Wednesday, leading it to explore all possible avenues to maximize shareholder value.
Sources familiar with the matter revealed that the bank had enlisted boutique investment bank Piper Sandler to help explore strategic options, including a potential sale. However, no formal sale process has been initiated, and PacWest is also considering raising new capital.
The U.S. regional banking sector’s turmoil intensified when Canada’s TD Bank announced that it would abandon its planned $13 billion acquisition of Memphis-based First Horizon. The two banks cited uncertainty surrounding regulatory approval of the deal as the reason for this decision.
Bitcoin Rally on the Horizon?
As traditional banks face increasing difficulties, the Bitcoin price has been steadily rising, with some experts predicting it could reach $35,000. Federal Reserve Chair Jerome Powell has hinted at a possible pivot, while JPMorgan analysts anticipate rate cuts starting in the next quarter. Bitcoin was trading at $29,399 at the time of writing this article, having gone up by over 3% in the past twenty-four hours.
Related: Bitcoin Price Prediction 2023, 2024, 2025, 2026 – 2030
The ongoing instability in the U.S. banking sector could be a driving factor behind a potential Bitcoin rally. With banks struggling, investors may seek alternative forms of investment, such as cryptocurrencies, to protect their wealth. This shift in investor preference could drive demand for Bitcoin, pushing its price higher.
Bitcoin Live News: BTC Price Eyes $30k as Fed Steps Up to Save More Banking Crisis
Bitcoin price bounced back above $29k on Thursday after the United States Federal Reserve announced the third 25 basis point hike on Wednesday. The banking sector in the United States has been on the receiving end YTD with four banks – including Silvergate Capital, Silicon Valley Bank, Signature Bank, and First Republic Bank – going underwater. While the crisis might be far from over, the large banks including JPMorgan, and Bank of America among others have significantly benefited from large deposits.
Nevertheless, more investors have preferred self-custodial through Bitcoin among other digital assets. Thereby contributing to the recent spike in the value of the top digital assets.
“We expect to see significantly more volatility in the months ahead, especially if there are any further aftershocks in US regional banking or concerns around the state of commercial property loans,” said Tommy Honan, head of market analysis at crypto exchange Swyftx.
$25k or New ATH for Bitcoin this Year?
With macro analysts and economists convinced the global market is headed for a recession before the end of this year, the big question is how Bitcoin and the altcoin market will perform. Meanwhile, Bitcoin price has consolidated between $30k and $27k since mid-March. As more crypto traders jumped into the meme coins wagon, especially PEPE and WOJAK, Bitcoin bulls struggled to push beyond $30k.
The tug-of-war between the bulls and bears has, however, increased the uncertainty of Bitcoin’s next trend. Moreover, there is a solid likelihood of Bitcoin retesting $25k before continuing with the previous bullish outlook. On the other hand, there is a significant chance a breakout toward $33k could happen in the coming days or weeks.
Charles Hoskinson Weighs in on the Future of Crypto Amid American Banking Crisis
During a Fox Business interview, Input Output Global, Inc co-founder, Charles Hoskinson, highlighted the state of the crypto market in the United States and globally at large. Popularly known from his role in Cardano (ADA) and Ethereum (ETH), Hoskinson stated that the crypto market is okay but the banks are not. He noted that the 2023 banking crisis is already worse than the 2008 financial distress. As a result, Hoskinson concluded that it is better to work in the crypto industry than in the banking sector.
Moreover, Hoskinson believes the global crypto regulatory scope has been getting better as observed in Europe with MiCA and the GCC countries. Nonetheless, the United States and its fragmented regulatory system have pushed crypto investors to global markets.
Future of Crypto Market in the United States
Hoskinson believes crypto will play a crucial role in the banking of most of the people in the United States. While the United States continues to formulate new crypto regulations, Hoskinson noted that most digital assets are not sure if they will be classified as a security, loyalty token, commodity, or currency. As a result, the Cardano leader insisted that most blockchain projects will focus on the abroad markets where there are clear and welcoming regulations.
Nevertheless, Hoskinson believes that the increased uncertainty of crypto regulations in the United States among other macro aspects has contributed to the increased volatility among most digital assets.
“Well, it’s also the macro economy, it’s hard to watch half a trillion dollars of bank failures and all the macro uncertainties, geopolitical issues, and not have some distraction to the markets… and it has mostly hurt retail investors,” Hoskinson noted.
Meanwhile, Cardano (ADA) has a total value locked (TVL) of about $150 million with top projects including Minswap, Indigo, and WingRiders.
BTC Price Analysis: Bitcoin Bull Run Fades Below $30k Amid U.S Banking Crisis
Bitcoin price edged higher on Wednesday to temporarily revisit $30k. However, the increased sell pressure pulled the asset down to close the day on a long-legged doji candlestick, which signifies indecisiveness between bulls and bears.
The daily volatility came amid renewed fears of United States banking collapse after First Republic Bank (NYSE: FRC) shares dropped 30 per cent on Wednesday. As a result, FRC shares are down more than 95 per cent YTD.
Notably, the bank announced in its first quarter earnings results that deposits declined more than 35 per cent in the first quarter compared to the same time last year. However, the bank anticipates being bailed out by the Fed in a similar version to Signature Bank and Silicon Valley Bank.
Closer Look at Bitcoin Market Outlook
With increased daily volatility, more than $178 million in the Bitcoin market has been liquidated in the past 24 hours. About 51 per cent of Bitcoin liquidations in the past 24 hours were long traders, thus displaying the intensity of the tug-of-war between the bulls and bears.
According to market intelligence platform Santiment, the low Bitcoin address activity amid next week’s FOMC statement sent shockwaves among many traders. Moreover, there is a high potential for an imminent recession before the end of this year.
Price Analysis
According to a popular crypto trader Jason Pizzino, all eyes are on today’s daily close. Essentially, if Bitcoin price closes Thursday trading above $29k, the bulls will have the upper hand in the coming weeks. On the other hand, if Bitcoin price closes below $29k, crypto traders will be looking at a possible head and shoulder formation that leads to further market capitulation.
Banking Giants SUED! Did Their Misleading Statements Lead TO SVB’s Collapse?
The collapse of Silicon Valley Bank (SVB), known for its crypto-friendly approach, has caused a seismic shift in the global banking industry. As the dust settles, industry giants including KPMG, Goldman Sachs, Bank of America, and Morgan Stanley have found themselves embroiled in a legal battle. The lawsuit alleges that these titans made misleading statements that contributed to the catastrophic collapse of SVB. The implications of this lawsuit are significant and could have far-reaching consequences for the industry.
San Francisco Court Showdown
A complaint filed in the San Francisco Federal court has taken aim at SVB’s auditors and underwriters, naming CEO Greg Becker and other bank executives as defendants. The lawsuit accuses the defendants of misrepresenting SVB’s financial health by overstating its balance sheet strength, liquidity, and market position. Furthermore, it claims that the auditor and underwriters concealed the true extent of the risks the bank faced, ultimately leading to its downfall.
Allegations of Misleading Statements
According to Bloomberg, none of the defendants have offered any comment on the matter yet. However, the lawsuit states that underwriters issued misleading registration statements on the bank’s stock offering, which played a significant role in the collapse. The complaint emphasizes that these statements contained untrue facts that further contributed to the bank’s demise.
The aftermath of the Collapse
As Coingape reported, SVB Financial Group filed for Chapter 11 Bankruptcy after failing to follow bets set on bonds due to a sudden spike in interest rates. The publication also noted that SVB Securities and SVB Capital’s funds and general partner entities are not part of these filings.
Also Read: Silicon Valley Bank Receives Overwhelming Support from Venture Capitalists – Coinpedia Fintech News
The unfolding drama surrounding the Silicon Valley Bank collapse has placed major financial players under the legal spotlight. As the lawsuit progresses, the repercussions of these allegations could have far-reaching implications for the industry at large.
What do you think- who is in the right over here?
Bitcoin Shines Amid U.S. Banking System Turmoil! Is This A Good Time To Invest?
Cryptocurrency markets, specifically Bitcoin (BTC), have shown remarkable resilience in the face of the recent upheaval within the U.S. banking system. A research report released by Coinbase on Friday reveals that Bitcoin has outperformed other digital assets since mid-February, with its dominance in the total crypto market cap increasing significantly.
Bitcoin Outperforms Peers in Turbulent Times
In the wake of the U.S. banking system turmoil, Bitcoin has managed to outpace its digital asset peers. During March, the cryptocurrency’s dominance as a percentage of the total crypto market cap grew to 47.7%, up from 43.9%. The report points out that the onset of the banking system’s upheaval coincided with this acceleration in Bitcoin’s outperformance.
Reasons for Bitcoin’s Resilience
One of the key reasons for Bitcoin’s strong performance, according to the Coinbase report, is the stress in the banking system reinforcing the cryptocurrency’s store-of-value properties. Since Bitcoin mainly exists outside of the traditional financial system, it offers a hedge against the prevailing conditions, making it an attractive option for investors.
Investor Worries Heighten
Bitcoin’s relative outperformance against other digital assets also stems from investor concerns about the regulatory status of other cryptocurrencies, as mentioned by analysts David Duong and Brian Cubellis.
Furthermore, the report highlights a significant drop in the correlation between Bitcoin and the S&P 500 stock index, which fell to 25% at the end of March, a stark contrast to the 70% peak in May of the previous year. This lower correlation indicates a growing detachment between cryptocurrency and traditional market movements.
The U.S. banking system’s troubles have shown Bitcoin’s strength and benefits, making it a reliable investment and protection against financial disruptions. With ongoing regulatory issues for other digital assets, Bitcoin’s strong performance is expected to continue.
Bitcoin and Ethereum Will Explode Fueled by Global Banking Crisis; Experts Unanimously Agree
The worst banking mess since the 2008 financial crisis has increased investors’ fear of a global recession. As a result, the investors’ perspective on Bitcoin and Ethereum, among other digital assets, has significantly shifted to less risky instruments. With the rising global inflation, holding on to fiat currencies continuously depreciates investors’ cash value. On the other hand, Bitcoin price is up nearly 70 percent YTD amidst global financial instability.
Investors have extensively understood the risk versus reward ratio for top digital assets is more attractive compared to the traditional stock markets. Moreover, the Web3 industry has gained significant momentum over traditional financial institutions in recent years. Additionally, blockchain technology has proved more resourceful to mainstream adoption through smart contracts to streamline global supply chain management.
Consequently, the banking stocks are expected to ditch further worldwide in the coming quarters, despite the decisive actions. Y different governments to print more money to bolster traditional financial institutions.
Experts Agree on Bitcoin and Ethereum Will Lead Crypto Explosion
In a recent YouTube video by altcoin daily, three financial experts — Chris Burniske, the former crypto analyst at Ark Invest, Mike McGlone, a senior macro strategist at Bloomberg Intelligence, and Robert Kiyosaki, famous author, and entrepreneur — unanimously agree the banking crisis is the trigger that will send Bitcoin and Ethereum to massive price explosions.
McGlone indicated that Bitcoin would likely outperform all other crypto assets due to the massive global adoption. Moreover, McGlone stated that investors are optimistic about Bitcoin overrunning Gold’s market capitalization.
Kiyosaki discredited veteran investor Warren Buffet for calling Bitcoin, and other cryptocurrencies zero intrinsic value assets. Notably, Buffett once referred to Bitcoin as a rat poison squared and eventually thought BTC value would fall to zero.
Breaking News: Deutsche Bank Shares Slumps 14% Amid Global Banking Crisis
In the latest global banking crisis, German multinational investment bank Deutsche Bank AG (NYSE: DB) signaled a red alert to investors on Friday. As of March 24, 12:06 p.m. CEST, Deutsche Bank shares traded around $8, down approximately 14 percent. Investors questioned the bank’s stability on Friday after the bank’s credit default swaps that insure against default shot to a four-year high.
Troubles at Deutsche Bank
According to market data provided by S&P Market Intelligence, Deutsche Bank’s credit default swaps (CDS) – a form of insurance for bondholders – shot up above 200 basis points (bps) – the most since early 2019 – from 142 bps just two days ago.
“Deutsche Bank has been in the spotlight for a while now, in a similar way to how Credit Suisse had been,” Stuart Cole, a head macroeconomist at Equity Capital, said. “It has gone through various restructurings and changes of leadership in attempts to get it back on a solid footing, but so far, none of these efforts appear to have really worked.”
Meanwhile, the bank decided to redeem its $1.5 billion Fixed to Fixed Reset Rate Subordinated Tier 2 Notes due in 2028.
Following today’s dip, Deutsche Bank shares are down approximately 29 percent in the past month and 31 percent YTD.
Bigger Picture
The troubles at Deutsche Bank came after Credit Suisse was bailed out from imminent collapse through government intervention. With three regional banks in the United States already collapsed, the fear of more bank runs could escalate in the coming weeks. As such, analysts anticipate Bitcoin price could rally further as demand for risky deflationary assets rises exponentially.
According to market data provided by Coingecko, Bitcoin price is up 1.7 per cent in the past 24 hours to trade around $28.2k.
Is The World Really Facing A Central Banking Crisis? Balaji Srinivasan Raises Alarms
Former Coinbase CTO, Balaji Srinivasan, sparked a heated debate on Twitter after posing a question about whether people believed the world is currently facing a central banking crisis. Only 35% of the 15,700 voters believed that there was a crisis.
Jason Calacanis, the founder of the All-In Podcast, replied, cautioning Srinivasan that he could be causing the crisis by reporting on it. Srinivasan rebutted this, emphasizing that he was only reporting on the crisis, not causing it. The former Coinbase exec then called for a correction on the record regarding the hyperbitcoinization bet, which has been a contentious issue.
Hyperbitcoinization Bet
Srinivasan outlined the specifics of the hyperbitcoinization bet, which is purely ideological and is aimed at settling the digital devaluation of the dollar. Srinivasan did not propose the bet but accepted it and had no profit motive.
He has committed to never selling Bitcoin for USD unless legally compelled to do so. The bet is purely informational and was proposed by James Medlock. Srinivasan has committed to holding Bitcoin until the US dollar is no longer the world’s reserve currency.
Srinivasan is a publicly known personality and has been in the public eye for over ten years, with thousands of tweets, hours of podcasts, and hundreds of pages of writing. He is an ideologically-driven person who believes in Bitcoin, and his stance on Bitcoin and its use as a reserve currency is well-known.
Response to the Crisis
Srinivasan’s concern about a central banking crisis is not unfounded. Several factors could contribute to such a crisis, such as inflation and the devaluation of fiat currencies. Moody’s has already downgraded the US banking system, and Chinese banks are soaring as Western banks are failing, indicating a shift in the global financial system. The world may need Bitcoin as the reserve currency if the USD fails.
Srinivasan’s main goal in raising the alarm about the crisis is to warn innocent Americans and dollar holders of the impending crisis, similar to Paul Revere’s warning during the American Revolution. Srinivasan believes that the digital devaluation of the dollar is a crisis, and he is raising awareness about it through the hyperbitcoinization bet.
186 Banks at Risk – Is the US Banking System on the Verge of Collapse?
A recent study by economists has revealed a chilling reality: 186 US banks are facing a potentially devastating risk due to issues similar to those that caused the collapse of Silicon Valley Bank. With interest rates on the rise, many banks are finding their assets diminished and their futures uncertain.
Asset Books and Market Value Losses: A Recipe for Disaster
The study evaluated individual US banks during the Federal Reserve’s swift rate-hike campaign, assessing asset books and market value losses. These assets – including Treasury notes and mortgage loans – are decreasing in value, and banks are struggling to keep up. This could be the beginning of the end for many financial institutions.
Funding Percentages: A Ticking Time Bomb
The study also analyzed the banks’ funding percentages, with a focus on funding derived from uninsured depositors, those with accounts holding over $250,000. The findings suggest that if even half of these uninsured depositors were to withdraw their funds rapidly from any of these 186 US banks, even insured depositors might face impairments. This is a ticking time bomb that could spell disaster for the entire banking industry.
Potential for FDIC Intervention: Will It Be Enough?
In such cases, intervention from the Federal Deposit Insurance Corporation (FDIC) could become necessary. The FDIC is a government agency that provides insurance to depositors in case of bank failure. However, if half of the uninsured depositors were to withdraw their funds, even the FDIC may not have enough resources to protect all depositors. The question is, will it be enough to prevent a catastrophic collapse of the banking system?
Limitations in the Study: What’s Not Being Considered?
It is crucial to note a significant limitation in this research. The study does not consider hedging strategies that may safeguard numerous banks against rising interest rates. These strategies involve financial instruments that protect against losses in value due to market fluctuations. Is there a glimmer of hope for the banking industry, or is it too little too late?
This study highlights the urgency of regular financial stability assessments and the importance of informed decisions by depositors when choosing a banking institution. The question remains – will we sit idly by, or will we take action to prevent a looming financial disaster?
Bitcoin Price Jumps 6% Rejuvenating Hopes of $30k Amid Banking Crisis
After rejecting $26.5k earlier this week, Bitcoin bulls pushed beyond $25k during the early Asian market. According to our latest crypto market data, Bitcoin price exchanges around $25.9k at the time of reporting, up approximately 6.5 percent in the past 25 hours. As the United States federal government prints more money to save the struggling banking industry, the Bitcoin market is expected to benefit from investors fleeing riskier assets significantly.
Moreover, the Federal Reserve has added $300 billion to its balance sheet over the past week, the highest in a short period since Black Thursday in 2020. According to banking giant JPMorgan Chase in a note to investors on Wednesday, the Federal Reserve May inject up to $2 trillion into the banking system following the collapse of three lenders over the past week.
As a result, the overall inflation is expected to rise despite the Fed’s initiative to bring it down to 2 percent. With Bitcoin’s inflation rate at 1.71 percent per annum, more investors are likely to ditch the fiat currencies for the risky digital asset.
Closer Look at Bitcoin Market
Bitcoin price is retesting the macro downtrend resistance level that began in late 2021. The Bitcoin market has recently increased its rate of decoupling from equities correlation, with the Nasdaq relation to the lowest. With the Fed’s action to print more Maloney to save the banking sector, the correlation is expected to widen further.
Meanwhile, on-chain data has shown that the Bitcoin market is growing rapidly. Notably, the total amount of Bitcoin addresses has grown by 1.71M, a 3.95% increase in the last two months.
Furthermore, the largest Bitcoin on-chain transactions of $1 billion have recently taken place from a single whale.
Circle CEO Reveals Vulnerabilities In USA’s Banking System: Are We Out Of The Woods?
Throughout the past few months, the financial sector has been in absolute chaos. The Silicon Valley Bank’s failure and subsequent closure by US regulators served as the catalyst for the event. After then, Signature Bank saw a similar end. The demise of Silicon Valley Bank had repercussions for Zurich-based lender Credit Suisse. Credit Suisse’s stock struck a new low during the first session of trading on the Swiss stock exchange.
The Federal Reserve unveils Bank Term Funding Program and the U.S. Treasury guarantees closed banks’ deposits.
Jeremy Allaire’s thoughts on the crash
The CEO of Circle, Jeremy Allaire recently discussed the irony of a traditional bank shaking up the larger crypto business.
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.
Even though Jeremy Allaire applauded the Federal Reserve and the US government for their $25 billion funding scheme to help banks like SVB that were having liquidity problems, he still believes the scenario Circle found itself in to be extremely exceptional.
Notwithstanding USDC’s slight reversion to its dollar peg, he indicated that Circle was ready to step in and use its corporate balance sheet if necessary to control the current upheaval.
Is the collapse over?
There are many different perspectives revealed by a review of recent events and potential outcomes of the closure of SVB and, to a lesser degree, the failure of the smaller Signature Bank of New York. Some contend that the crisis has passed its worst while others assert that the breakdown exposed systemic issues.
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.
Following the failure of Silicon Valley Bank, the Treasury Department, Federal Reserve, and Federal Deposit Insurance Corp. rushed to allay concerns about the stability of the country’s financial system on Sunday. They pledged to fully protect all depositors’ money while also granting any banks struggling with liquidity easier terms on short-term loans.
The US Banking Crisis’s Domino Effect: Which Banks Could Be Next To Fall?
There have been numerous financial industry crises recently, which have created tremendous chaos. Initially, when FTX’s stock fell, another victim was claimed by the collapse of the well-established US Bank Silvergate capital.
In a collapse that shook international markets, SVB Financial Group, a lender with a focus on startups, on March 10 became the largest bank to fall since the 2008 financial crisis. The passing of Signature, which had $100 billion in assets, is a shock to many professional services companies that had grown dependent on it.
Lender Credit Suisse, situated in Zurich, faced the effects of the contagion brought on by Silicon Valley Bank’s failure. In the opening session of trading on Switzerland’s stock exchange, shares of Credit Suisse hit a new low.
These incidents never occur in isolation and almost always affect the market more severely.
Will additional institutions be in jeopardy now? Read on.
Scott Hamilton on the collapse and its repercussions
Scott Hamilton who is the contributing editor in Finextra Research has explained the failure of SVB. Silicon Valley Bank (SVB) went bankrupt this week, taking with it a 40-year legacy rooted in the ingenuity and optimism of its namesake Northern California home. Everyone is wondering what will happen now that the over $200 billion deposit institution that may have banked about 50% of all IT businesses has gone bankrupt.
A review of recent events and possible outcomes of the SVB closure and, to a lesser extent, the failure of the smaller Signature Bank of New York reveals a wide range of opinions. While many believe that the breakdown revealed systemic problems, some claim that the worst of the crisis has passed.
Several regional banks’ shares were crushed over the weekend as a result of the SVB debacle. Three institutions with heavy concentrations in technology and venture capital experienced major ‘market hangovers’ from weekend events.
They are Western Alliance Bancorporation which has lost 84% to its March 8 close price just above $71 per share, First Republic Bank whose stock slumped to a mere $20, from $147, and Pacific Western Bancorp which declined over 50% since its previous close on March 10, leaving it trading at below $6 a share, compared to nearly $29 per share.
After the recent closure of Silicon Valley Bank (SVB), many corporations have disclosed their exposure to the now-collapsed bank. Companies that have disclosed exposure with Silicon Valley Bank are Circle: $3.3 billion, Roku: $487 million, BlockFi: $227 million, Roblox: $150 million, Ginkgo Bio: $74 million, IRhythm: $55 million, RocketLab: $38 million, SangamoTherapeutics: $34 million, LendingClub: $21 million and Payoneer: $20 million.
In his prediction, Hamilton claimed that there could be “dominoes” among the remaining American financial institutions, particularly the local, smaller banks that have succeeded, like SVB.
Binance Shuts Down Sterling Transactions Following Split with the UK Banking Partner
In recent months, cryptocurrency investors and enthusiasts have been rocked by a series of sudden collapses of banks that were once seen as friendly to the crypto industry. These banks, which had previously been critical partners for crypto exchanges and firms, have abruptly cut ties with their crypto clients, leaving many investors reeling and uncertain about the future of their investments. According to recent news, crypto exchange giant Binance has decided to suspend sterling deposits and withdrawals for UK users after losing its banking partner.
Paysafe Cut Ties with Binance Following Regulations
On Tuesday, a spokesperson for Binance announced that the world’s largest cryptocurrency exchange would be putting a halt to sterling deposits and withdrawals just one month after it ceased transfers in US dollars.
According to the Binance spokesperson, the exchange’s partner for sterling transfers, Paysafe, has notified them that their services will be discontinued starting May 22, which will affect all of Binance’s customers. As a result, new users have been unable to make sterling transfers since Monday. The spokesperson said:
“Binance will ensure that affected users are still able to access their GBP balances. The change affects less than 1 percent of Binance users.”
Binance Witnesses a Major Setback in the UK
The exact number of clients affected by the cessation of sterling transfers was not disclosed by Binance, which boasts a customer base of over 128 million. However, the company’s spokesperson confirmed they are actively seeking an alternative solution for sterling transfers.
This latest development is just another challenge for Binance in its efforts to gain access to traditional currencies. In fact, last month, the exchange had to suspend all dollar bank transfers due to increased regulatory scrutiny and crackdowns on the crypto industry by U.S. authorities. A Paysafe spokesperson said:
“We have concluded that the UK regulatory environment in relation to crypto is too challenging to offer this service at this time and so this is a prudent decision on our part taken in an abundance of caution.”
Binance, led by billionaire CEO Changpeng Zhao, is currently under investigation by the Justice Department for potential money laundering and sanctions violations. A high-ranking Binance executive informed Bloomberg and The Wall Street Journal last month that the exchange is anticipating penalties as a resolution to the ongoing investigations.
In addition to the regulatory scrutiny, Binance also faced difficulties accessing dollars after the U.S. Securities and Exchange Commission disclosed that it was contemplating taking action against the issuer of its “BUSD” stablecoin. This announcement resulted in approximately $6 billion in outflows earlier this month, posing another obstacle for the exchange.
The split with Binance’s UK banking partner is the latest in a series of setbacks for the exchange after facing increased regulatory scrutiny. While Binance has maintained that it is committed to complying with all relevant regulations, its troubles with banking partners suggest that the exchange may be facing an uphill battle.
FED Is Unlikely To Hike Interest Rates In March Amidst Banking Stress And Chaos: Goldman Sachs
The current state of the cryptocurrency market seems to be very unstable. With banks collapsing, stablecoin de-pegging, and the Fed raising interest rates, there is turmoil everywhere. The year began on a positive one, and everyone believed that the market was recovering from the influences of 2022, but things now appear to be rapidly declining.
What are the regulators doing in response to all this mayhem is the question on everyone’s mind. Following the fall of the Silicon Valley Bank, President Joe Biden of the United States has vowed to penalize those accountable while assuring the public that their deposits remain secure.
What comes next? Is the situation going to improve or worsen?
Goldman Sachs change predictions
Goldman Sachs analysts have altered their forecast for the upcoming Federal Reserve meeting in the United States, noting that they no longer expect a rate hike. This shift in forecasting is attributable to recent stress in the banking sector, which has created significant uncertainty about the path of future rate hikes beyond March.
In a recent tweet, investor Pomp has mentioned about the most recent predictions of Goldman Sachs. It was said that Goldman Sachs is now predicting that the Fed will not hike interest rates in March due to the stress in banking institutions and that it would be a historic change of strategy for a central bank who have struggled with predictability in recent years.
The company had previously anticipated a 25 basis point rate increase from the Federal Reserve. The Federal Open Market Committee raised the federal funds rate by a quarter percentage point last month, to a target range of 4.5% to 4.75%, the highest since October 2007.
Leaving aside March, Goldman Sachs economists added that they still anticipate 25 basis point hikes in May, June, and July.
Similar to 2008?
The relief measures announced on Sunday, according to Goldman Sachs experts, fall short of those taken during the 2008 financial crisis. While the Fed established a new Bank Term Financing Program to support institutions harmed by market volatility following the SVB loss, the Treasury classified SVB and Signature as systemic risks. Although they fall short of the FDIC’s 2008 guarantee of uninsured accounts, both of these measures are anticipated to boost depositor confidence.
Not everyone is on the same page
Not everyone shares Goldman Sachs’ perspective. In a recent interview with Bloomberg, Mohammed Apabhai, Head of Asia Trading Strategy at Citigroup Global Markets, expressed his opinion that the SVB debacle will not prevent the Fed from raising interest rates. He went on to say more, saying,
“In my view, no. The reason why is that we’ve been doing a lot of work, as you can imagine, about whether there is any systemic risk that there is coming through here. Doesn’t really seem like it is.”
Just a few days ago the Fed announced that they plan to continue remaining very hawkish as they believe a tougher stance is required to combat inflation. However, back then SVB had not crashed yet.
In conclusion
Could the SVB collapse change the stance of the Fed on rising interest rates? Would it get delayed as said by Goldman Sachs or would it not be affected by the SVB collapse?
Banking Crisis Looms: Is Crypto The Future Of Secure Investing?
The collapse of two of the top United States banks, Silicon Valley Bank and Signature Bank, has been considered the most bullish thesis for Bitcoin and other leading digital assets. Moreover, the top digital assets, including Bitcoin, Ethereum, and BNB, have gained over 7 percent in the past 24 hours as investors scramble for more secure investment tools.
Could The Banking System’s Failure Prove Beneficial For Crypto?
Notably, the $25 billion bailout by the United States federal government has investors questioning the fractional reserve banking system that requires lenders to maintain only a small portion of deposits available for withdrawal while the rest are lent out to fuel economic activity.
Furthermore, all banks around the world operate in a similar manner, thus piling the risk of higher inflation should more bank runs occur in different countries at an unprecedented rate.
Such a scenario could trigger a banking crisis much worse than the 2008 financial crisis. With the United States CPI data set to be announced tomorrow, economists anticipate the Fed will soon divert from its fight against inflation.
Bitcoin to the Moon?
According to Michael Casey, author of ‘The Age of Cryptocurrency’, a similar situation to the 2012–2013 Cypriot financial crisis could be unfolding. Casey indicated that the Cyprus bank failure in 2013 fueled the Bitcoin rally 2013 to a great extent.
Researcher Nik Bhatia and market analyst Joe Consorti said that the Fed is responsible for the bank’s failure due to its aggressive interest rate hikes, among other monetary easing programs.
“The Fed’s aggressive rate hikes and balance sheet reduction have caused a historic bank failure — fashioning a real-time ad for Bitcoin self-custody,” Bhatia said.
As the banking system faces new challenges, is it time to consider alternative investment options like Bitcoin and Ethereum? How are you diversifying your portfolio?
Swiss Bank Cité Gestion Makes History by Tokenizing Its Own Shares, Setting a New Standard for Private Banking
The payment industry has evolved a lot since the advent of cryptography and web3 technologies. Several banks have been putting efforts into bringing a new revolutionizing payment infrastructure by integrating the web3 model in an attempt to provide enhanced protection against account confidentiality, counterfeiting, and other types of fraud.
Recently, Swiss bank Cité Gestion set a new benchmark in the private banking sector by tokenizing its own shares using Taurus technology and diving deeper into the blockchain-based payment world.
Swiss Bank Ventures Into Tokenization
Tokenization is the process of transferring traditional assets, such as shares, into digital tokens that can be traded and stored on a blockchain network. Cité Gestion, which has been an independent Swiss private bank since 2009, has now successfully implemented Taurus technology to tokenize its own shares to provide ample features and enhanced encryption to its shareholders.
According to the latest statement, this move from Cité Gestion will be the first in the private banking sector to issue shares in a tokenized form, in compliance with the ledger-based securities under Swiss law. The statement stated that Cité would go into an agreement with a prominent crypto firm Taurus to deploy smart contracts in issuing and listing its tokenized shares.
Private Banks Embrace Crypto
Tokenization is a new trend in the payment infrastructure as it gains more trust from financial institutions by allowing TradFi players to onboard more investors to the web3 era. Taurus said in a statement,
“Taurus believes that digitization of private assets and securities is becoming the new standard in the digital asset industry.”
The private bank explained that the process of tokenization was carried out by abiding by the standards of the Capital Markets and Technology Association (CMTA). Christophe Utelli, Deputy CEO of Cité Gestion, commented,
“Taurus and the application of the CMTA standards ensure that an adequate risk management framework is at the heart of the process. It was important for our bank to be among the first to take advantage of the new possibilities offered by Swiss law for the digitalization of securities by tokenizing our own shares.”
By tokenizing its shares, Cité Gestion aims to make it easier for investors to buy and sell shares, as well as it will open multiple doors to keep track of their ownership. Furthermore, this step from the private bank could also increase liquidity and transparency for shareholders in deciding on the investment option.
Last year, Taurus gained a securities license from the Swiss Financial Market Supervisory Authority, and now the crypto firm seeks to provide investors and banks the ability to enter into the blockchain space by offering tokenized securities. Tokenization of shares is not only a step forward to implementing the crypto for a good cause for Cité Gestion but also for the whole banking industry.
It is expected that other private banks will soon follow in the footsteps of Cité Gestion and start tokenizing their own shares as well to give the banking industry a web3 shape, and this could lead to a more efficient and transparent way of trading shares, which would benefit both investors and companies.
U.S. Banking Community Launches Proof-of-Concept Digital Money Platform
A group of United States banks, including BNY Mellon, Citi, HSBC, Mastercard, PNC Bank, TD Bank, Trust, U.S. Bank, and Wells Fargo announced the launch of a proof-of-concept (PoC) project aimed at developing a digital dollar currency platform dubbed the regulated liability Network (RLN). According to the announcement, the RLN is expected to harness the prowess of distributed ledger technology.
Reportedly, the regulated liability Network (RLN) is expected to run in a test version for the next twelve weeks. As such, regulated United States banks will come together to test digital dollars in a tokenized version.
“The 12-week PoC will test a version of the RLN design that operates exclusively in U.S. dollars where commercial banks issue simulated digital money or “tokens” – representing the deposits of their own customers – and settle through simulated central bank reserves on a shared multi-entity distributed ledger,” the announcement reads.
The banks will be testing how well a digital dollar could help reduce friction in inter-banks payments. Additionally, the United States banks intend to see how well the RLN will function with existing laws set by different agencies.
U.S Banks Build on Blockchain Tech Amid Bearish Sentiments
The group of United States banks has shocked the cryptocurrency industry by building at a time the FTX collapse has shaken confidence. Notably, most market strategists forecast further capitulation in the crypto market. Moreover, Bitcoin price broke a significant support level at $19k following the Alameda and FTX saga.
The RLN has been developed by SETL, Amazon Web Services, and Swift. As for the legal team, the RNL will be backed by Sullivan & Cromwell LLP while Deloitte will be providing advisory services.
After twelve weeks, the RNL results will be analyzed and used for further development in digital money, according to the announcement. Furthermore, the banking group announced that there is no commitment plan to continue with the project after the RNL simulation is completed.
Banks in the United States have significantly invested in the Web3 industry, despite the sustained bear market.
Nonetheless, cash inflows toward the blockchain and crypto markets are expected to decline in the coming months.
Furthermore, the overall trading volume has significantly shrunk in the past few months. Whereby the remaining majority of trading volume has been scooped by decentralized exchanges (DEXes).
Notably, the digital dollar being tested by the group of United States banks may be a confirmation of a possible CBDC backed by the Fed around the corner.
Binance CEO Seeks To Bridge The Gap Between Traditional Banking and Cryptocurrency: Here’s How
Venture capital investments have significantly decreased since 2021 due to the $2 trillion market loss brought on by the cryptocurrency inversion, also known as the “Crypto Winter.” Some of the well-known crypto companies in the sector have experienced hardships and turmoil, and many have had to shut shop and declare bankruptcy.
The opportunity to add new businesses to their portfolio has, however, never been better for industry titans like Binance and FTX who have surplus cash on hand.
Acquisitions on the Horizon
Binance, a cryptocurrency exchange, recently made headlines when it announced it’s plans to spend $1 billion on strategic acquisitions this year, piquing the interest of investors already interested in the assets it trades.
Recent news indicates that Binance is actively pursuing the acquisition of banks as a means of bridging the gap between conventional banking and the cryptocurrency business.
Here’s what Binance CEO Changpeng Zhao had to say at the Web Summit conference in Lisbon:
“Various local licenses, traditional banking, payment-service providers, and even banks are all held by individuals. We are taking a look at those topics. We aim to serve as a link between the traditional financial sector and cryptocurrencies.”
The increasing interconnectedness of conventional financial systems and cryptocurrency markets is reflected in CZ’s remarks.
Therefore, it is desirable that the two elements cooperate with one another rather than fostering competition.
For example, BlackRock and Goldman Sachs are two of the largest financial organizations that are actively participating in the cryptocurrency sector.
In spite of the fact that the crypto winter is still running strong, BlackRock made the decision in August 2022 to form a partnership with Coinbase to assist its institutional clients in gaining exposure to digital assets at a price that makes sense.
Binance To Explore Global Territories
According to Binance CEO Changpeng Zhao, the company is willing to consider both complete and partial acquisitions. In addition, he said
“What we have discovered is that when banks partner with us, we bring so many users to them, therefore the bank’s valuation increases enormously. Why don’t we just invest in them as well, so that we can capture some of the equity upsides?”
Zhao was also a key player in the recent Twitter deal as he contributed $500 million to Elon Musk to acquire Twitter. He also stated that he would like to join the Twitter board upon Elon Musk’s approval. Additionally, Binance is ready to offer blockchain-based solutions to address the Twitter bot problem.
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Crypto Banking Platform BVNK To Offer Virtual Asset Services In Spain
The post Crypto Banking Platform BVNK To Offer Virtual Asset Services In Spain appeared first on Coinpedia Fintech News
With its registration as a virtual asset services provider with the Bank of Spain, BVNK will now be able to provide its services to corporations throughout the nation.
BVNK, a cryptocurrency banking, and payments platform, has been approved as a virtual asset services provider (VASP) in Spain. BVNK’s registration with the Bank of Spain will allow it to provide services to businesses throughout the nation.
BVNK assists businesses in providing crypto services that are not currently available through established payment and settlement providers.
It accepts over 100 cryptocurrencies, including bitcoin, ether, Cardano, and Solana.