In the US, cryptocurrencies were named the main reason for the collapse of the largest banks

Former U.S. Congressman Barney Frank blamed cryptocurrencies for the collapse of the U.S. banking sector. Bloomberg writes about it. According to the former politician, legislators and regulators have not properly controlled the digital asset market since 2008.

«A new and potentially destabilizing element is being introduced into the financial system — digital currency. Whatwe are getting is a failure,» Frank said, commenting on the situation with the closure of Silicon Valley Bank (SVB).

According to the former politician, 2023 is fundamentally different from 2008: the financial system is less vulnerable than it was then. Although the crypto sector is harming the banking industry, Frank believes it will not break it.

Signature Bank, of which Barney Frank is a member of the board of directors, has become the third cryptocurrency-friendly bank to cease operations in the past few weeks. New York regulators explained the situation by the need to protect the US economy. Thus, officials believe, it will be possible to strengthen public confidence in the stability of the banking system.

Prior to Signature Bank, the largest partner banks of cryptocurrency companies, Silvergate Capital and Silicon Valley Bank, faced coll apse. Amid rumors of the bankruptcy of the first bank, the American crypto business almost immediately began to urgently cut ties with Silvergate. It was believed that Signature Bank was an alternative to Silvergate, but it also failed to cope with the crisis.

Subsequently, SVB, which held the reserves of many cryptocurrency companies, also faced problems. As a result, one of the largest stablecoins, USD Coin (USDC), lost its peg to the US dollar and fell to $ 0.879, causing panic in the market. It is worth noting that USDC has now stabilized and is holding the $ 1 level.