The recent closures of three major US banks, Silicon Valley Bank, Signature Bank, and Silvergate Bank, have sent shockwaves through the crypto community, leaving some questioning the future of crypto banking in America. The banks were considered to be some of the few traditional banking partners that were friendly to the crypto industry, offering real-time payment platforms that enabled commercial crypto clients to make dollar payments at any time.
The closure of these banks has left many in the industry concerned that crypto companies will be left without banking options, causing crypto liquidity to be threatened. Crypto investor Scott Melker believes that the collapse of the three banks will leave crypto companies without banking options, stating that there is “basically nobody left to bank crypto companies in the US.” Meltem Demirors, chief strategy officer of CoinShares, shared similar concerns and highlighted that “crypto in America has been unbanked.”
The closures are expected to create a significant gap in the market for crypto-friendly banks. Jake Chervinsky, head of policy at the Blockchain Association, believes this will be an opportunity for other banks to step up and fill the void. However, there are already viable alternatives out there. United Texas Bank, Western Alliance Bank, JP Morgan Chase, and Bank of New York Mellon all have crypto businesses as customers, with more banks expected to follow suit. Mike Bucella, General Partner at BlockTower Capital, believes that while near-term crypto banking in North America is a challenging place, there is a long tail of challenger banks that may take up the slack.
The closures have also put the future of USDC in doubt, with Ryan Selkis, CEO of blockchain research firm Messari, warning that the message from DC is clear: crypto is not welcome in the US. Selkis believes that the entire industry should be fighting to protect and promote USDC, stating that it is the last stand for crypto in the US.
However, despite the concerns, USDC has bounced back to its $1 peg, following confirmation from CEO Jeremy Allaire that its reserves are safe, and the firm has new banking partners lined up. This news has been welcomed by the crypto community, and it is believed that the closure of these banks could lead to greater innovation within the crypto banking sector, as other banks strive to fill the void left behind.
In conclusion, while the closure of these banks has caused concern within the crypto community, it is believed that it presents an opportunity for other banks to step up and provide crypto-friendly banking services. The closure of Silicon Valley Bank, Signature Bank, and Silvergate Bank may lead to greater innovation within the crypto banking sector and strengthen the industry as a whole.