{"id":75510,"date":"2023-03-14T12:19:16","date_gmt":"2023-03-14T10:19:16","guid":{"rendered":"https:\/\/forklog.com\/en\/?p=75510"},"modified":"2025-09-10T12:03:48","modified_gmt":"2025-09-10T09:03:48","slug":"circle-and-coinbase-accuse-banks-of-destabilising-the-cryptocurrency-market","status":"publish","type":"post","link":"https:\/\/u1f987.com\/en\/circle-and-coinbase-accuse-banks-of-destabilising-the-cryptocurrency-market\/","title":{"rendered":"Circle and Coinbase accuse banks of destabilising the cryptocurrency market"},"content":{"rendered":"<p>Problems in the banking sector have created uncertainty in the cryptocurrency market, according to the co-issuers of the USDC stablecoin\u2014Circle and Coinbase, <a href=\"https:\/\/www.theblock.co\/post\/219405\/circle-coinbase-highlight-instability-crypto-concentration-in-tradfi\"> The Block<\/a> reports.<\/p>\n<p>On 11\u201312 March, USDC&#8217;s price diverged sharply from parity after <a href=\"https:\/\/u1f987.com\/en\/news\/usdc-loses-peg-to-the-dollar-amid-svb-collapse\">reports<\/a> that Circle held part of the asset&#8217;s reserve at <span data-descr=\"Silicon Valley Bank\" class=\"old_tooltip\">SVB<\/span>, amounting to $3.3 billion.<\/p>\n<p>The situation normalised after <a href=\"https:\/\/u1f987.com\/en\/news\/us-rescue-saves-svb-and-signature-bank-depositors-stablecoins-narrow-the-depegging\">the regulators&#8217; decision<\/a> to rescue the bank&#8217;s depositors. The <span data-descr=\"U.S. Federal Reserve\" class=\"old_tooltip\">Fed<\/span> also<a href=\"https:\/\/www.federalreserve.gov\/newsevents\/pressreleases\/monetary20230312a.htm\"> launched a $25 billion Bank Term Funding Program<\/a> (BTFP) to restore confidence in the sector.<\/p>\n<p>Beyond SVB, Circle also worked with <span data-descr=\"Signature Bank\/New York NY\" class=\"old_tooltip\">SBNY<\/span> and Silvergate Capital, which also collapsed in recent days.<\/p>\n<p>Media reports revealed that the leadership at Silicon Valley Bank included a former <span data-descr=\"chief financial officer\" class=\"old_tooltip\">CFO<\/span> of the infamous Lehman Brothers Joseph Gentile, as well as a <span data-descr=\"risk manager at Deutsche Bank\" class=\"old_tooltip\">risk manager<\/span> at Deutsche Bank, Kim Olson, during whose tenure the institution paid a $7.2 billion penalty for deceiving investors.<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">Two executives at SVB worked at banks that contributed to crisis <a href=\"https:\/\/t.co\/TxM7knPdoJ\">https:\/\/t.co\/TxM7knPdoJ<\/a><\/p>\n<p>\u2014 Daily Mail US (@DailyMail) <a href=\"https:\/\/twitter.com\/DailyMail\/status\/1635382147325231104?ref_src=twsrc%5Etfw\">March 13, 2023<\/a><\/p><\/blockquote>\n<p> <script async=\"\" src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p><em>The irony in this <a href=\"https:\/\/ru.wikipedia.org\/wiki\/%D0%A7%D1%91%D1%80%D0%BD%D1%8B%D0%B9_%D0%BB%D0%B5%D0%B1%D0%B5%D0%B4%D1%8C_(%D0%BA%D0%BE%D0%BD%D1%86%D0%B5%D0%BF%D1%86%D0%B8%D1%8F)\" title=\"\">black swan<\/a> is that the contagion originated not from crypto to TradFi, but from TradFi to crypto<\/em>, \u2014 Caroline Hill, senior director of global policy and regulatory strategy at Circle.<\/p>\n<\/blockquote>\n<p>The senior executive urged improvements to the regulation of the sector.<\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p><em>\u00abUltimately we adhere to a fully reserved model for the stablecoin, dependent on banks\u00bb<\/em>, she explained.<\/p>\n<\/blockquote>\n<p>The Block noted that recent days have further strained relations between TradFi and the digital-asset industry. U.S. banking regulators issued <a href=\"https:\/\/u1f987.com\/en\/news\/fed-warns-banks-of-liquidity-risks-tied-to-crypto-firms\">numerous warnings<\/a> about crypto-related risks shortly before problems at Silvergate, though the bank&#8217;s collapse was driven by a drain of deposits.<\/p>\n<p>The European Commission adviser on Markets in Crypto Assets (MiCA), Peter Karster, acknowledged challenges for the industry in the wake of the collapse of the three mentioned banks.<\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p><em>\u00abMany banks, \u2026 some regulators say they will have nothing to do with cryptocurrencies\u00bb<\/em>, he explained.<\/p>\n<\/blockquote>\n<p>According to Coinbase&#8217;s vice president of regulatory policy, Scott Bauguess, the industry has difficulty because of the limited number of banks that continue to do business with crypto firms.<\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p><em>\u00abThey are concentrating risks in the banking sector. We see that TradFi has infected the industry, not the other way around\u00bb<\/em>, the executive explained.<\/p>\n<\/blockquote>\n<p>Custodia&#8217;s CEO Caitlin Long (formerly Avanti), whose crypto bank received<a href=\"https:\/\/u1f987.com\/en\/news\/caitlin-long-accuses-regulators-of-corruption-in-industry-regulation\"> the Fed&#8217;s refusal<\/a> to obtain a license, condemned the regulator&#8217;s<a href=\"https:\/\/u1f987.com\/en\/news\/fed-weighs-creation-of-expert-group-for-the-crypto-industry\"> admission<\/a> of errors in SVB oversight.<\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p><em>\u00abMr. Barr [in charge of this function at the Fed], is Custodia&#8217;s 100% reserve model unsafe and unsustainable? Aren\u2019t you curious how we anticipated and warned about the bank-service issues? Won\u2019t you finally meet?\u00bb<\/em> she asked.<\/p>\n<\/blockquote>\n<p>In February, Long admitted corruption in matters of regulating crypto firms.<\/p>\n<p>Earlier, Compound founder Robert Leshner did not rule out an \u201cArmageddon\u201d in the industry as a result of actions by U.S. regulators.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Problems in the banking sector have created uncertainty in the cryptocurrency market, according to the co-issuers of the USDC stablecoin\u2014Circle and Coinbase, The Block reports.<\/p>\n","protected":false},"author":1,"featured_media":75511,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"1","news_style_id":"1","cryptorium_level":"","_short_excerpt_text":"","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[3],"tags":[1229,1220,138],"class_list":["post-75510","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-analysis","tag-banks-and-fintech","tag-circle","tag-coinbase"],"aioseo_notices":[],"amp_enabled":true,"views":"28","promo_type":"1","layout_type":"1","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/75510","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/comments?post=75510"}],"version-history":[{"count":1,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/75510\/revisions"}],"predecessor-version":[{"id":75514,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/75510\/revisions\/75514"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/media\/75511"}],"wp:attachment":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/media?parent=75510"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/categories?post=75510"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/tags?post=75510"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}