The question of the potential role of the crypto industry in the recent banking collapse is controversial. Some US officials have strong opinions. For others, the answer is not so obvious.
Cryptos, indirect culprits of bank failure?
The Federal Reserve (Fed) was able to block the expansion of the recent banking crisis with $300 billion in support. But the question of the causes of this situation, particularly that of a potential contribution from the crypto industry, crystallizes the exchanges at the level of the public authorities. This is the observation during the discussions that took placeon this subject, members of the executive with the House of Representatives.
It must be said that opinions on the matter remain on the whole very mixed. Asked whether the industry may have contributed to the bankruptcies of SVB and Signature banks, Nellie Liang, the Under Secretary of State for the Treasury, replied: “I don’t think the [compagnies de, Ndlr] cryptocurrencies played a direct role in these two bankruptcies”.
If there is liability, it would therefore be indirect. This is what can reasonably be inferred from the intervention of the manager. His opinion, however, seems to have no connection with the position taken by Michael Barr, Vice Chairman of the Federal Reserve, on this subject.
According to the latter, who also took part in the hearings, the sinking of these two banks would be the direct consequence of ill-considered commercial choices. This, he points out, is especially true for SVB. The fall of the latter is linked to the “classic interest rate risk management”.
Anyway, we can at least position ourselves in favor of an indirect contribution from the crypto industry to this crisis. An opinion which would be based on the fact that the latter held large sums with these banks. Which would have ultimately worsened the bank run that led to their downfall.
This position is all the more relevant since the Federal Deposit Insurance Corporation (FDIC) is currently working to return some $4 billion in funds. Crypto deposits made with the defunct Signature Bank.
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