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.