Bitcoin

Today&#39;s bankruptcy of California&#39;s Silicon Valley Bank removes one lending partner from the cryptocurrency industry, increasing pressure on stablecoin producer Circle to expand its bank partner network.The largest bank to fail since the 2008 financial crisis was Silicon Valley Bank, which counts several software companies and startups among its clients. The FDIC seized control on Friday. Shortly after crypto-friendly, Silvergate announced it was liquidating, Silicon Valley Bank collapsed.There are now two fewer institutions left for Circle to use to store the money linked to its USDC stablecoin. Sources claim that Circle is currently building new banking connections. The stablecoin issuer also conducts business with Citizens Trust Bank and BNYMellon.Circle said in a late-Friday tweet that Silicon Valley Bank is one of six banking partners it employs to manage the 25% of USDC reserves held in cash. &#34;Circle &amp; USDC continue to operate regularly while we await clarification on how the FDIC receivership of SVB would impact its depositors.&#34;Competitor Tether is growing its own banking connections and adding to an existing &#34;resilient network of strong institutions,&#34; despite Silicon Valley Bank&#39;s claim that it was not exposed to it. Independent of current developments, these ties have been &#34;in the works for a time,&#34; according to CTO Paolo Ardoino. According to Tether, it had no contact with Silicon Valley Bank.Another stablecoin issuer, Paxos, likewise made the observation that it had no exposure to Silicon Valley Bank. Even with the failure of Silvergate, more established companies like Circle and Tether may have a stronger financial position. In the current financial and regulatory environment, smaller crypto firms or businesses intending to enter the industry may have a more challenging time finding a bank to collaborate with.&#34;There is really nothing stopping a bank from banking a crypto company, but your bank regulator is going to come look at your books more frequently — let&#39;s say every six months instead of every 12 — and that makes your life harder and raises compliance costs,&#34; said Meltem Demirors, chief strategy officer of CoinShares. In other words, &#34;for many banks, the juice isn&#39;t worth the squeeze unless a crypto business is a truly substantial revenue producer.&#34;

Stablecoin Issuers Seek to Diversify Banking Partners in the Wake of Silicon Valley Bank's Meltdown

ItsBitcoinWorld

Other articles published on Mar 11, 2023

BabySwap Community is growing with YOU!

Optimism: Can this new announcement save OP from the bear attack

Silicon Valley Bank Shut Down by Regulators Amid Financial Woes

Bankrupt Crypto Lender Voyager Sells 400 Billion Shiba Inu ($SHIB) on Coinbase

Zedxion Fake token minting scam

BitMEX Co-founder Arthur Hayes Proposes Bitcoin-backed Stablecoin

Join our free newsletter for daily crypto updates!