It has probably not escaped your notice that there is a small banking crisis in America. Silicon Valley Bank, the 17th largest bank in the United States, collapsed last week and the US authorities have stepped in to bail out and guarantee customers’ capital. Coinbase CEO Brian Armstrong responds to those events with a remarkable message.
Will Coinbase continue as a bank?
Ryan Lackey, the CSO of Evertas Insurance, sent a message to Coinbase CEO Brian Armstrong via Twitter asking if it wouldn’t be interesting for them to turn the exchange platform into a neobank. Armstrong immediately responded positively by telling Lackey that they have thought about this at Coinbase.
It is striking that Armstrong points out that Coinbase would then probably become a bank that does not do fractional banking. After all, the current situation shows once again that capital in the traditional financial system is not safe in an ordinary bank account.
Ultimately, the government will step in when things get dangerous, but the collapse of Silicon Valley Bank will mean a dent in the confidence of the banking sector. Incidentally, the Dutch banks Aegon and ING currently have it equally heavy with the ‘banking crisis’ that is currently going on.
Problems for Coinbase?
Incidentally, Coinbase also had $240 million in capital with Signature Bank as of March 10. Signature Bank is another party that also failed to keep its head above water. However, Brian Armstrong’s US-listed exchange platform expects to get back all of its cash positions at Signature Bank.
It promises to be an exciting few weeks for the industry in that respect. Starting with the problems that are currently going on around Silicon Valley Bank and the rest of the American banking world. The Federal Reserve’s interest rate hikes now seem to be having a real effect within the financial system, which is slowly beginning to shake.