The collapse of Silvergate, Silicon Valley Bank (SVB), and Signature has left the crypto industry scrambling for new banking partners.
It’s important to remember that Silvergate and Signature played a crucial role in global crypto markets, providing the three primary banking functions, deposits, transfers, and loans. And all that in dollars and major cryptocurrencies.
These three banks maintained such a position that even many crypto firms outside of the US used them.
For example, the Silvergate Exchange Network (SEN) and Signature’s digital payments platform Signet also allowed customers to send stablecoins and USD 24/7, which is impossible with the legacy banking system.
Crypto is looking for new banking partners
Crypto firms are now forced to hunt for new banking partners.
Luckily, many banks outside the U.S. are still comfortable with banking crypto clients. These banks are in jurisdictions ranging from Singapore and The Bahamas to Liechtenstein and the United Arab Emirates.
However, there are two major issues.
First, is that some of the banks don’t have US Dollar correspondent banks.
And the second issue is that most of these banks refuse to onboard clients that are U.S Persons due to draconian FATCA regulations.
Beginning of the end for crypto?
Many bitcoiners predicted that classifying all crypto tokens as securities would be the beginning of the end for the crypto industry.
However, it seems that the crash of the largest crypto-friendly banks will be the last nail in the crypto coffin.
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