Amid the collapse of three banks in just two weeks, Cardano’s founder, Charles Hoskinson has stated that the crypto industry needs to sever relationships with traditional banks.
He started this in a series of tweets puts out on Thursday.
Hoskinson’s opinion comes as a result of the ongoing crisis and the collapse of about three reputable financial institutions, of which the most recent is the collapse of the New York-based Signature Bank.
The Cardano Chief added that crypt banks should be digitized, stating that once that happens, it would mean the end for the traditional banking sector. Hoskinson worries that crypto-focused firms are too dependent on traditional banks.
Investors King earlier reported that crypto firms are beginning to have difficulty finding partnering banks for their services after three of America’s leading financial institutions, Silvergate Capital, Silicon Valley Bank, and Signature Bank were shut down by regulators earlier this month, propelling severe losses for numerous crypto-focused firms.
Most prominent among the affected crypto-focused firm is Circle, the producer of USD stablecoin which had $3.3 billion stuck in Silicon Valley Bank. This caused USDC to plunge to as low as $0.87 before rebounding to its true value of $1 value.
Similarly, crypto exchange Coinbase said it held $240 million in corporate cash at Signature Bank, while Paxos had $250 million exposure to the same bank.
Meanwhile, a number of crypto experts and enthusiasts have extolled the crypto market and the industry in general for its resilience in the past weeks amid a series of negative events involving the collapse of three giant banks.
The flagship cryptocurrency had exploded above $26,000 on Monday after US President, Joe Biden assured that the banking system is “safe”.
“Americans can rest assured that our banking system is safe. Your deposits are safe. Let me also assure you we will not stop at this; we’ll do whatever is needed. Your deposits will be there when you need them”. Joe Biden said in a brief televised statement from the White House.