Circle CEO Claims Ongoing Banking Crisis and Regulatory Uncertainty May Push Investors Out of US
Jeremy Allaire is the CEO of Circle Foundation. He has recently shared the prediction in his latest statements that the changing tides of regulatory waves in the US territory have started to compel the cryptocurrency investors in the region to dissolve their crypto positions.
He pointed out that another major reason for the increasing pressure around crypto is the ongoing banking crisis.
It is worth noting that during March, Silicon Valley Bank, or SVB, underwent a collapse on account of various financial constraints. Circle was among the firms that have a considerable reserve invested in SVB.
Therefore, SVB’s demise resulted in the de-pegging of USDC from the $1 valuation. The stablecoin was noticed trading at $0.87 when a $3.3 billion reserve was revealed under custody at SVB. Nevertheless, the institute was able to deal with the matter without causing its investors any harm.
Crypto Companies Also Affected due to Regulatory Uncertainty
He was invited to speak at Bloomberg on the matter of crypto regulations and the future of the sector in the country. Allaire maintained that cryptocurrency entities should be ready for a turbulent time ahead on account of the rocky regulatory terrain paved by crypto investors.
He pointed out that the banking system can direct American cryptocurrency investors to look for new avenues or regulatory jurisdictions. He maintained that the US banking system is seen as a beacon for the next shift in the financial sector on an international scale.
Meanwhile, crypto enterprises have also shared some concerns regarding the crypto sector. The crypto sector faced some big challenges last year, such as FTX and Terra Luna crashes. According to Allaire, such events were the result of a lack of proper regulatory oversight.
However, it is worth noting that considering the ongoing financial and economic setback, there were the least amounts of corporate casualties noted in the crypto sectors in comparison to its contemporaries.
He mentioned that Congress could play a role in speeding up the crypto regulatory process in the US. Allaire has become another key person to reiterate the opinion of Coinbase CEO Brian Armstrong.
The crypto exchange head has relayed in the past that the exchange may have to shift to offshore territories in case of a lack of a proper crypto regulatory charter.
In addition to the regulatory expectations concerning the crypto sector, he also shared his vision on the looming banking crisis that can impact the US economy and investors.
There are some interjections that the three banking enterprises affected by the recent banking crisis, namely Silvergate, Silicon Valley, and signature banks, were midcap banking sectors with a valuation of 2-10 billion USD.
Circle was able to successfully recover $3.3 billion deposits at SVB and regain the $1 peg. All eyes are currently on First Republic Bank, which reported a 50% stock price reversal as part of its Q1 performance review.
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