Coinbase CEO ponders banking features after Silicon Valley Bank crisis
The wider cryptocurrency community continues to debate the ongoing fallout following the closure of three major American banks, with calls for neobank services for the industry on the cards.
Silicon Valley Bank (SVB), which has traditionally served startups across a number of innovation sector industries, was shuttered by California’s Department of Financial Protection and Innovation on March 10.
The reasons surrounding the closure are still coming to light but the news caused shockwaves through the industry, primarily driven by USD Coin (USDC) issuer Circle having over $3.3 billion of its $40 billion reserves locked up in the bank.
Signature Bank, which also serves some cryptocurrency firms, followed a similar fate on March 12. The New York Department of Financial Services (NYDFS) took possession of the bank to prevent further bank runs as customers looked to pull out funds from SVB and Signature.
The closure of SVB was particularly hard-hitting, as the USDC stablecoin briefly lost its $1 peg driven by major uncertainty around the effect Circle’s exposure would have on the ability to manage redemptions.
Related: Silicon Valley Bank collapse: Everything that’s happened until now
USDC has seen its peg creep back up to the $1 mark after Circle CEO Jeremy Allaire announced that the stablecoin issuer has lined up new banking partners as of March 13 in the United States.
Given the tumult of the past few days, the cryptocurrency ecosystem is now taking a closer look at ties to traditional finance institutions that serve fiat currency deposits, withdrawals and monetary flows.
Coinbase CEO Brian Armstrong took to Twitter on March 13, saying that the American cryptocurrency exchange has previously considered features that could
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