Changpeng Zhao has hinted at the possibility of purchasing a bank in light of recent problems with crypto-friendly banks.
As contagion continues to spread from the Silicon Valley Bank and ongoing distress from crypto-friendly lenders like Silvergate, many crypto firms and VCs are preparing for worst-case scenario spillovers, including several leading exchanges — some of whom have floated the idea of swallowing up banks in the past.
The situation has predictably caught the attention of Binance’s founder.
Two days ago, CZ shared a news article from 2022 to his 8.2 million Twitter followers, a Tweet linking to an article from Yahoo! Finance stating that Binance had once considered purchasing a bank.
Is it time yet? Not sure.
https://t.co/IR4XscGw29
— CZ
Binance (@cz_binance) March 11, 2023
Binance recently made several investments in traditional institutions, including a $200 million strategic investment in media firm Forbes in 2022. The crypto exchange has also backed Elon Musk’s acquisition of Twitter.
Meanwhile, Binance is not alone in considering a move into traditional finance; Kraken has also stated its intention to open a bank.
Read more: Kraken eyes own bank amid regulatory scrutiny
The collapse of FTX has put crypto-friendly banks under increased scrutiny, with the recent failures of SVB and Silvergate adding to the pressure on these institutions.
CZ supports more stablecoins.
The Binance CEO also Tweeted his support for other stablecoins in the broader ecosystem. He was noting Binance’s recent addition of numerous stablecoin pairs.
Supporting multiple stablecoins, always. More to come. https://t.co/5W1mHzOjoG
— CZ
CZ also speculated that “it feels like there is a coordinated effort to shut down crypto-friendly banks” like Signature.
“Banks are a disk to fiat-backed stablecoins,” he added in a follow-up Tweet.
The recent failures of crypto-friendly banks, such as SVB and Silvergate, have further highlighted the need for stablecoins to hedge against traditional finance risk.
With CZ’s statements and actions suggesting that he recognizes the potential risk of stablecoins existing within traditional finance, his doubling down and support for other stablecoins and the broader stablecoin ecosystem indicate that he sees stablecoins as a valuable asset and something that should be defended from traditional financial industries, some of whom have a vested interest in seeing entities such as stablecoins fail.
What’s clear is that the crypto industry continues to evolve and either integrate or disintegrate with traditional finance. As such, stablecoins are to play an increasingly important role in whatever the future dynamic of crypto is likely to look like.
It’s worth noting that not all stablecoins are created equal, and some may be more susceptible to certain risks than others. Additionally, many stablecoin issuers are working to address these risks and improve transparency and oversight in the industry.
The post Binance CEO CZ ‘Banks are a risk to fiat-backed stable coins’ in reaction to SVB, USDC Depegging appeared first on CryptoSlate.
