By Larry Wright
There have been considerable discussions on the matter of economic deterioration and recent banking failures on social media. People are worried about the increasing costs of living, the depleting reserves of fuels, and the depleting value of fiat currencies.
Financial analysts and economists have shared their perspectives and observations on the matter. However, much like the expert, the opinion among the masses on finding the right culprit is still divided.
Some critics have directed their cynicism toward cryptocurrencies to play a role in bringing about this financial apocalypse. However, many professionals from the cryptocurrency world have come forward to defend their positions.
One such person is IOG CEO Charles Hoskinson. He recently posted on Twitter to address the criticism surrounding cryptocurrencies. In his latest tweet, he claims that cryptocurrency projects have survived the pressure that has taken down traditional banks.
Recognition of Crypto Assets
Speaking on the matter, Hoskinson claimed that cryptocurrency projects like Paxos, Circle, and Tether have managed to survive the financial conditions that have put down traditional banking giants.
He demanded that it is time that the crypto cynics must change their perception towards cryptocurrencies and acknowledge their resilience. He was referring to a release issued by the White House earlier this year titled Administration Roadmap to Mitigate Cryptocurrency Risks.
This release published some regulatory guidelines that were directed toward Congress. His remarks have arrived at a time when the US government is dealing with the collapse of the biggest lenders and banking enterprises. During March, three important traditional banks, namely Silvergate, SVB, and Signature have, going out of business.
The Federal Reserve, in association with other state agencies, has decided to offer bailouts. However, the accumulated loss caused by the fall of these banks is estimated to be greater than the 2008 financial crisis.
Despite the collapse of traditional banking enterprises, some financial analysts are still not sure about the utility of cryptocurrencies. On the other hand, the support for cryptocurrencies has grown stronger than before.
Most crypto proponents argue that blockchain projects like Bitcoin were introduced as a response to the 2008 financial crisis. Others believe that periods of economic downturns are a compulsory part of the boom and recession cycle inherent to capitalistic systems.
The first banking enterprise to take the fall was Silvergate, which opted for a voluntary insolvency proceeding by announcing the date of its liquidation.
It was shortly followed by Signature Bank and Silicon Valley Bank; both these banks were shut down by regulators on account of liquidity issues. Recently, HSBC announced that its UK subsidiary is going to acquire SVB for 1 GBP or $1.25.