The collapse of tech lenders and crypto-friendly banks like Signature Bank, Silvergate, and Silicon Valley Bank has left a gaping hole in the financial markets. On one hand, stablecoins have the potential to step up and bridge the gap, while on the other, relying on traditional financial institutions seems to be a viable option.
Via a textual commentary to Watcher Guru, Petr Kozyakov, Co-founder and CEO at payments infrastructure platform Mercuryo, highlighted the need for digital asset projects to find “new” banking partners at this stage. Well, it seems like that phenomenon is already in play.
A recent report from CoinDesk revealed that its parent and VC company Digital Currency Group is looking out for “new banking partners for portfolio companies.” Citing messages viewed, the crypto media house’s report noted,
“Santander (SAN), HSBC (HSBA), Deutsche Bank (DB), BankProv, Bridge Bank, Mercury, Multis and Series Financial are still willing to connect with crypto firms, according to the messages. DCG had also reached out to BlackRock (BK), JPMorgan (JPM) and Bank of America (BA), according to the list.”
Also Read: HSBC Acquires Silicon Valley Bank’s UK Arm for £1
DCG reaches out to other international banks as well
According to the report, the banks in context could restrict some services for cryptocurrency firms, like brokerage, money market services, and the ability to wire money to third parties. However, traditional banks may reportedly be “willing to set up banking accounts for crypto firms,” with due restrictions in place pertaining to the level of cryptocurrency exposure.
Here, it is interesting to note that customers have been flooding large U.S. banks with requests to transfer their funds from small lenders. As reported earlier, JPMorgan Chase, Citigroup, and other big financial institutions are trying to accelerate the typical “onboarding” process to accommodate customers who wish to carry out immediate transactions.
Also Read: JPMorgan, Citigroup Overwhelmed with Requests After SVB Collapse
CoinDesk additionally pointed out that the Western Alliance and Bridge Bank “are still opening accounts for crypto firms.” In fact,
“DCG had also reached out to international banks including Revolut in the U.K., United Overseas Bank (UOB) in Singapore, and Bank Leumi in Israel.”
According to Kozyakov, global cryptocurrency adoption can become a reality, when the market passes through the “long and thorny path.” Elaborating on the same, he told Watcher Guru,
“As cryptocurrency adoption is becoming more ubiquitous, the industry is adapting to new realities, testing the banking system, and cleaning up the market. It’s a good lesson everyone can learn from to create better alternatives in the future without the flaws that led to the collapse of the financial institutions.”