The Fed issued an extraordinary information sheet on Sunday night, Hungarian time. Another financial institution that played a central role in the digital asset industry also failed.
From the statement it turned outthat the state watchdog closed Signature Bank, but assured frightened investors that the American banking system, despite the failure of the institutions “continues to withstand the rigors and stands on solid foundations”. Silicon Valley Bank and Signature Bank depositors are fully protected and have access to their assets starting today. The decision was made jointly by US Federal Reserve Chairman Jerome Powell, US Treasury Secretary Janet Yellen and Federal Deposit Insurance Corporation (FDIC) President Martin Gruenberg with US President Joe Biden. They also said that regulations created following the 2008 global financial crisis “provide better security for the banking sector”so the crisis cannot be repeated.
Signature Bank is the third financial institution to declare bankruptcy in the past week. Silvergate said it would voluntarily liquidate its operations and guarantee to pay its depositors in full. Earlier, the bank stated that it would also terminate the Silvergate Exchange Network (SEN), through which institutions might transfer funds to cryptocurrency exchanges. A similar service was provided by Signature Bank, which operated its digital payment platform under the name Signet. Of the institutions in question, the latter company – with its total assets of approximately 110 billion dollars – played a more significant role among cryptocurrency investors.
After the statement was released, cryptocurrency prices began to head north, and the USDC stablecoin also regained its peg to the US dollar, which it had previously lost amid the collapse of Silicon Valley Bank. In any case, the cryptocurrency community is far from happy, as the sector has said goodbye to its most important relationships. The affected cryptocurrency exchanges and companies are expected to announce in the next few days how this will affect their operations.
Our related articles:
https://www.youtube.com/watch?v=videoseries
