Lately, there has been a sequence of banks that are linked to the crypto industry collapsing. For example, Silvergate and Signature banks had many cryptocurrency customers. In contrast, Silicon Valley Bank (SVB), the largest of the three, collapsed with its assets governed by the Federal Deposit Insurance Corporation.
The markets are fabulous now, but people are still worried about the future of digital currencies and their affiliation with Traditional Finance (TradFi). Severe consequences may arise due to the de-baking of the cryptos as companies venturing into cryptocurrencies will have to look for other banking firms, which could damage the invention and advancement of blockchain technologies.
The downfall and shutting of crypto-friendly banks are likely to derail the progress of the crypto industry, and the crypto-native collapses could result in a harsh environment to support technological inventions in the United States. Everyone is keen on seeing how the industry will acclimatize to these hiccups.
Crypto Investments Depended on Specific Payment Systems
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Crypto venture capitalists, exchanges, and startups are finding it to do business in the US after the collapse and closure of the top three most crypto-friendly banks, i.e., SVB, Silvergate, and Signature.
Although depositors will be fully reimbursed for the losses they may have incurred, their full-time payment from platforms such as Sivergate and Signate will be no more.
As of Tuesday, it is reported that Signature Bank’s Signet utilities are still accessible, but crypto enthusiasts are looking for alternative solutions. Their fast move can be understood because they want returns from their investments.
Both Silvergate and Signature banks supported crypto banking services to their customers. As a result, investors could make payments using US dollars without network fees, process payments immediately, and 24/7 crypto-related services.
SEN entered the market in 2017, and Signet followed after two years. From 2019 both platforms have transacted $2 trillion in blockchain assets. The closure of these two payment platforms will inconvenience many crypto users.
Where Can You Find Banks That Are Friendly to Crypto?
The community of people who started crypto-related firms is working tirelessly to find new banking partners. On Twitter, the direction of the industry has become an issue of concern. Digital Currency Group (DCG), the holding company of Coinbase, is looking for new banking associates for group companies.
According to sources, DCG has acknowledged Multis, Series Financial, Mercury, Bridge Bank, Santander, HSBC, Deutsche Bank, and NankProv and is ready to work with the crypto companies. The source says that some banking amenities may be restricted to crypto firms.
These services encompass brokerage, money market operations, and transferring funds to external entities. In as much as traditional banks will be allowed to register crypto accounts, limitations will be enforced based on the degree of their cryptocurrency experience.