Top US Treasury Officials Said In Bank Failure Crypto Had No Direct Role
One of the top US Treasury officials, Nellie Liang, recently claimed that cryptocurrency played no direct part in bank collapses. However, she informed the House MPs that the collapse of big institutions like Silicon Valley Bank and Signature Bank was not primarily caused by the cryptocurrency industry.
Crypto Had No Direct Role In Bank Failure , Says Nellie Lang
The failure of SVB and Signature Bank should not be attributed to the crypto market or the sector of digital assets, according to Nellie Liang, the undersecretary for domestic finance at the US Treasury Department.
On Wednesday, Liang stated, “I don’t believe that crypto played a direct part in any of the disasters,” at a hearing of the House Financial Services Committee. And when questioned if the crypto sector had any indirect influence, she mentioned that Signature was involved in it.
Martin Gruenberg, the chairman of the Federal Deposit Insurance Corporation (FDIC), had earlier informed House legislators that by the end of 2022, around 15% of Signature Bank’s deposit base will be linked to cryptocurrency investors. But, over the past two days of hearings, when the House of Representatives and the Senate looked into the failure of the banks, the link between the cryptocurrency business and two of its favorite banks attracted a lot of attention.
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The recent fire that started the US financial crisis, according to the authorities, was started by two regional lenders and a smaller organization, Silvergate Bank, which took business risks that weakened their resilience. Michael Barr, Vice Chairman for Supervision at the US Treasury Federal Reserve, claimed that Silvergate Bank’s problems were a result of their traditional interest rate risk management.
More specifically, these banks have sizable amounts of uninsured deposits from various crypto businesses. They failed because of the cryptocurrency market’s erratic behaviour and the quick withdrawal of money at a time when the sector of digital assets was experiencing recent difficulties.
Lawmakers Are Tensed For Banks Management System
As you are aware, top US Treasury official Nellie Liang stated that there was no clear correlation between cryptocurrency and bank collapses. The house legislators, however, showed little interest in concentrating on the crypto-related concerns over the two days of congressional hearings.
The hearings made clear that issues with the management systems of the banks under the FDIC and Fed’s supervision and possible breakdowns were the legislators’ and regulators’ top concerns US Treasury.
FAQs
Why do banks not like Bitcoin’s?
Governments and banks are wary about Bitcoin because of its growing popularity and adoption, though. The public’s usage of Bitcoin as a store of wealth and a means of trade means that governments and banks have less and less influence over the financial systems.
Do banks accept Bitcoin?
While some US banks enable you to buy Bitcoins using your bank account, the majority of US Treasury banks forbid clients from buying or exchanging any kind of cryptocurrency. That could all be about to change, though, since the federal government has lately proposed new regulations regarding digital currencies.
Also Read: BITCOIN 2024 HALVING IS GOING TO BE EXTREMELY IMPORTANT
