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Weekend Fintech Review: Will the US Banking Crisis Affect the World? The current situation poses a real threat, but it's essential to examine how it has affected individuals and what possible outcomes might emerge.
Silvergate announced voluntary liquidation on March 8, 2023. On March 10, 2023, Silicon Valley Bank ceased its operations, while on March 12, 2023, Signature Bank also shut down.
As the week comes to a close, it's a good time to reflect and draw conclusions for the following week. The ongoing crisis in US banks is primarily the result of actions taken by US regulators to combat inflation. Some measures, such as the closure of Signature, which was friendly towards cryptocurrencies, appear arbitrary.
Despite this, certain cryptocurrencies, such as USDT, are seen as safe havens. It is no coincidence that investors prefer certain cryptos over others. Cryptos that are viewed as more "institutional" make investors feel more secure.
This could lead to an increased emphasis on CBDCs in the future. We've noticed that all actions taken against the crypto space have been aimed at assets that are entirely outside of regulatory control.
A more robust regulatory response typically follows crises, and the current crisis bears a striking resemblance to the 2008 financial crisis, despite many experts denying it. We've identified at least three key similarities between the 2023 and 2008 crises.
Some experts fear that the crisis could lead to a panic that spreads globally. However, certain markets, such as China, as well as fin-tech industries in Africa and India, appear to have been only slightly impacted by the crisis and continue to attract investments.
Nevertheless, depositors and investors worldwide are at risk of losing their funds. Fintech and tech industries, in general, are global markets, and when institutions connected to these industries collapse, a domino effect is highly likely.
What triggered the US banking crisis?
The crisis was primarily triggered by US regulators' actions to combat inflation, leading to the closure of several major banks including Silvergate, Silicon Valley Bank, and Signature Bank.
How has the crisis affected cryptocurrencies?
Some cryptocurrencies like USDT have become safe havens, while others face increased regulatory scrutiny, particularly those outside regulatory control.
What are the global implications of the crisis?
While some markets like China, Africa, and India show resilience, there's a risk of global panic and potential domino effects in the fintech and tech industries.
How does this crisis compare to 2008?
The current crisis shows several key similarities to the 2008 financial crisis, despite expert denials, particularly in terms of regulatory response and market impact.
What might be the long-term effects?
The crisis could lead to increased emphasis on CBDCs and more robust regulatory frameworks for cryptocurrencies and financial institutions.
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