Post-SVB market dynamics show a shift in consumers
SVB collapsed days after it was crowned one of the best banks in the United States of America. Attempts are underway to find a way for customers not to lose money. It was not a day’s work that exposed the delicacies of the US banking infrastructure but something that was months in the making. How things went unnoticed remains a mystery, but more on that later. For now, the focus is on how the market is behaving after SVB’s collapse and the exposure of the banking infrastructure in the US.
Jeremy Allaire has published his insight to highlight that different perspectives are coming out following the collapse of SVB. Most of them deal with USD becoming increasingly exposed to US banks and the risks arising when the US regulatory implements a policy half-heartedly or aggressively.
Jeremy has described the situation as a large-scale risk-off, claiming that the factors of US banks and regulators only appear to have increased the risk of the USD losing its value. There is anxiety in the market about how deep the exposure is and whether the aggressive stand taken by the crypto industry will continue in the days to come.
SVB’s fall also raises questions about whether the exposure is short-term or if there are implications that spread across a larger scale.
Macro risks are driving customers away from the US dollar to transition to a crypto world where BTC and ETH ideally operate to mitigate the loss that would be otherwise suffered by customers. Jeremy has indirectly talked about how crypto ventures are treated. Despite maintaining a strong position with the baking system and US regulators, he has stated that they are considered unsafe.
The Co-Founder and Chief Executive Officer of Circle then added that crypto ventures are considered risky because assets can be left stranded by them.
A decision may soon have to be taken because the transition is not exactly happening the way it should. Consumers are migrating to platforms despite a lack of control and an increased danger of funds being lost within the system. Furthermore, the majority of such firms lack financial integrity, which is definitely terrible for everyone.
With experience spanning over 10 years, Jeremy says that he has never seen a situation where the implementation of coherent and pragmatic policies was needed at the earliest. The US could lose its tech arena if the policies are not supportive of the development.
As for Circle, Jeremy has committed to continue working as usual within the framework drafted by regulators. Jeremy has assured that customers will have transparency, and partners will have a strong financial market infrastructure while maintaining the highest possible level of transparency.
Circle is trying to get the world back to a place where always-on digital dollars can be used for issuance and redemption 24 hours a day, seven days a week, 365 days a year. Customers can expect more baking partners to help with the settlement mechanism.