Ripple Is Protected from SVB`s Collapse: Brad Garlinghouse
Just two days after California regulators shut down Silicon Valley Bank (SVB) and placed it under the control of the US Federal Deposit Insurance Corporation (FDIC), Ripple CEO Brad Garlinghouse reassured members of the Ripple community that the bank's collapse was not cause significant damage to the company. SVB is currently known to hold approximately $175 billion in deposits, with 89% of these deposits uninsured. At the time of its bankruptcy, Silicon Valley Bank was the 16th largest bank in the United States and the largest bank in Silicon Valley in terms of deposits. His clients include many tech giants, including Ripple. “Obviously a lot is still unknown about what happens with SVB, and as is the case with many others, we hope to have more details soon – but rest assured, Ripple remains in a strong financial position… It’s ironic that so much of what’s happening (as some companies scramble to make payroll) highlights how broken our financial systems still are.” — Garlinghouse wrote. Meanwhile, the US federal authorities are seriously concerned about the ability to protect all uninsured deposits in Silicon Valley Bank. According to The Washington Post, obtained from “three people with knowledge of the matter,” the feds are set to intervene emergency to prevent what they believe could cause a panic in the US financial system.
Charles Hoskinson Proposes a Return to Algorithmic Stablecoins
The founder of the Cardano ecosystem, Charles Hoskinson, sees algorithmic stablecoins as the key to solving persistent depegs in the long term and notes that they are necessary to fully realize Satoshi Nakamoto's original vision for bitcoin: “I still firmly believe that algorithmic stablecoins long term are the most essential research stream to fully realize the original vision of Bitcoin.” — Hoskison wrote in a March 11 tweet. The crypto engineer also expressed skepticism towards banks, saying that “they will always let you down” as long as they are based on fractional reserves. Fractional reserve banking is a system in which banks must hold a portion of deposits in reserve and lend out the remainder. This can be dangerous, as bank runs could lead to insufficient reserves and insolvency, followed by losses for depositors. Notably, Hoskinson has been actively supporting algorithmic stablecoins since the infamous TerraUSD (USTC) crash. This type of stablecoin, which includes the recently launched DJED, may be the only solution to the perennial depegging problem associated with stablecoins like USDC, he says.
Joe Biden Seeks Culprits in SVB and SB Bankruptcy
U.S. President Joe Biden tweeted that he was “firmly committed” to holding “full accountability” those responsible for the collapse of major banks Silicon Valley Bank (SVB) and Signature Bank (SB) and reassured Americans of safety their contributions. Yesterday, March 12, the New York Financial Services Authority acquired SB. And representatives of the US Federal Reserve System (FRS) announced the creation of a $25 million fund to help “weakened banks” and specified that Signature Bank was closed to protect the US economy and strengthen public confidence in the banking system. Biden wrote tonight that he was pleased with the “reached a solution that protects workers, small businesses, taxpayers and our financial system” that was taken by government officials. Sen. Sherrod Brown and Rep. Maxine Waters also said they support the federal regulator's decision to insure all SVB savers. Meanwhile, the infamous US Securities and Exchange Commission (SEC) chairman, Gary Gensler, seized the moment and apparently stepped up the Commission's efforts to prosecute wrongdoers. At the same time, the industries in which this activity will be the highest are not announced, but they are quite easy to “guess,” since Gensler claims that the SEC will look for violators of US securities laws.