The digital asset market has experienced a turbulent year, with multiple high-profile blow-ups, and now three banking industry shutdowns have set off fresh stress.
The failure of SVB Financial Group’s Silicon Valley Bank triggered a knock-on effect in the stablecoin market.
The shutdown of crypto-friendly bank Silvergate is most weighing on the market.
Silvergate established the Silvergate Exchange Network, known as SEN, in 2017, which allowed users, including hedge funds and crypto firms such as Coinbase Global, to transfer funds seamlessly and nearly instantaneously.
SEN handled $563.3 billion of US dollar transfers last year alone. Its shutdown threatens to stifle growth while new alternatives ramp up.
Crypto trust companies, already holding customer digital assets and enjoying relationships with banks, are mulling entering the fray and providing SEN-like functionality.
Stablecoins carry their own risks, as USD coin’s travails showed.
New York and federal authorities have already gone after a Binance-branded stablecoin issued by Paxos Trust and known as BUSD.
»Crypto at risk: Three banking industry shutdowns«
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