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Several Ripple executives have spoken out about the banking crisis in the United States. The company itself has been affected by the collapse of Silicon Valley Bank (SVB). As Ripple CEO Brad Garlinghouse clarified on Sunday, the company is affected “to some extent.”
SVB was a banking partner and held a portion of Ripple’s cash balance. Still, Garlinghouse assured that there will be no disruption to day-to-day operations, as Ripple holds much of its US dollars with a broader network of banking partners.
Here’s How Ripple Assesses The “Bank Bailouts”
While some have called the recent intervention a bailout, U.S. President Joe Biden stressed yesterday that the rescue is not at taxpayer expense and is funded by fees banks pay into the deposit insurance fund. Ripple executives also see the intervention as necessary and the only right decision.
Susan Friedman, International Policy Counsel at Ripple, laid out that Senator Liz Warren laments a system that intervenes overnight to ensure that billion-dollar crypto companies don’t lose a single penny in deposits. “But there is no doubt that had gov’t not stepped in, many businesses (not just crypto) would have been devastated.”
“And a point that bears repeating – crypto is a legal industry within the U.S. and globally that deserves to be banked,” Friedman further clarified, who was a senior advisor to CFTC chairman Heath Tarbert prior to Ripple.
Stuart Alderoty, Ripple’s Chief Legal Officer praised California Congressman Ro Khanna on Twitter for his role in protecting the deposits of Silicon Valley Bank’s customers. Alderoty thanked Khanna for his leadership, adding that the bailout includes startups in numerous different sectors:
Thank you Ro Khanna for your leadership to make SVB depositors whole. Some may decry ‘VCs and tech’ but this includes startups tackling hugely important problems within healthcare, climate change, AI, fintech, national security, and yes, sometimes even crypto.
Alderoty also stressed that “none of this money” comes from taxpayers, but from a tax on banks that funds the Federal Deposit Insurance Corporation (FDIC). He also voiced a proposal to raise premium payments for banks to protect depositors of payroll and regional banks and to prevent consolidations.
The attorney also argued that accountability and regulatory gaps should be addressed to protect depositors. “[They] did nothing but place their cash in a bank that in turn invested in government-backed debt. This isn’t risk taking, this is conservatism.”
Asheesh Birla, General Manager of RippleNet, offered another perspective in an interview with Reuters. Birla is very pleased with the US government’s decision to shore up deposits but not compensate the bank’s shareholders
Meanwhile, he predicts that big banks will be the winners of the crisis. Startups will open accounts with large US banks en masse in the coming days as a result of the uncertainty surrounding smaller, regional banks.
And for companies that have significant cash on hand, he expects strong interest in hiring treasurers who will work to minimize the companies’ cash holdings. Via Twitter, the executive added:
If you are Fintech that is having trouble opening a bank account, please contact me. I may have some options for you.
The company thus seems to have no problem in coping with the SVB and bank bankruptcy. The XRP price was $0.3701 at press time, up 0.2% in the last 24 hours.
Featured image from Financial News, Chart from Tradingview.com