Speech after SVB bankruptcy
U.S. President Joe Biden delivered a speech on Thursday saying the U.S. banking system is safe. He also said he plans to push for more regulation of banks.
President Biden said:
Rest assured that all customers who had deposits with Silicon Valley Banks and Signature Banks will be protected and have access to their funds starting today. Small businesses across the country that have deposited in these banks will also be able to pay their salaries, pay their bills and continue their business.
This is against the backdrop of the US government’s temporary intervention following the failure of Silicon Valley Bank (SVB). Treasury Secretary Janet Yellen, Federal Reserve Chairman Jerome Powell and Federal Deposit Insurance Corporation (FDIC) Chairman Martin Gruenberg said in a joint statement Wednesday that they would take action to protect the U.S. economy. bottom.
All depositors at Silicon Valley Bank now have access to all funds. Depositors of U.S. Signature Banks, which have been suspended due to the Silicon Valley bank failure, will also receive the same treatment.
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Biden reiterated that the process would not be a burden to taxpayers as it would be funded by fees that banks pay to the deposit insurance fund.
It also explains that the management of Silicon Valley Bank and Signature Bank will be fired and that investors in those banks will not be protected.
“It is necessary to investigate the cause and tighten regulations.”
President Biden continued as follows, saying that it is necessary to investigate the cause.
The key question is why these banks got into this situation in the first place. The full picture of what happened and who should be held accountable must be revealed.
“We must mitigate the risk of such incidents recurring,” it said. The Trump administration has loosened some requirements for banks, but he said he will now ask Congress and regulators to tighten rules on banks.
Silicon Valley Bank was shut down by California regulators after it failed to respond to a surge in outflows on Monday. And on Thursday, New York regulators shut down Signature Bank to protect depositors.
Impact on the cryptocurrency industry
Since both banks also have connections with the crypto asset (virtual currency) industry, multiple companies are being forced to respond.
Circle, which issues US dollar-linked stablecoin USDC, said it plans to transfer cash currently deposited in Silicon Valley Bank (SVB) to major BNY Mellon Bank.
connection: US Circle CEO emphasizes safety of stablecoin USDC reserve
Major US cryptocurrency exchange Coinbase also said it is now using other banking partners to conduct cash transactions for its users due to the closure of Signature Bank.
connection: U.S. signature bank closed, impact on virtual currency industry due to successive bank failures
Signature Bank is one of the leading banks serving the cryptocurrency industry. Bernie Frank, a member of the board of directors of Signature Bank, has taken his own view that the bank’s closure suggests that regulators are against cryptocurrencies.
Depositors withdrew about 1.3 trillion yen after SVB’s bankruptcy, but the bank had total assets of about 14.6 trillion yen as of December 31, 2022, and said there was no need to suspend operations. .
Regulatory officials, however, denied that any particular industry, including cryptocurrencies, was the reason for the shutdown due to Signature Bank’s broad customer base.
connection: Signature Bank Director “U.S. Regulators Oppose Virtual Currencies”
What is a stablecoin
A cryptocurrency whose price is always stable. Stablecoins are a type of cryptocurrency, and unlike BTC, ETH, and XRP, which have volatility, their purpose is to maintain their value ($1) backed by the US dollar. In addition to US dollar-backed stablecoins (USDT/USDC), there are also stablecoins that use algorithms.