Ripple Boss Opens Voice Regarding Company Partnerships With Silicon Valley Bank

Ripple CEO Brad Garlinghouse. (Photo; Doc. Techcrunch)

JAKARTA - Technology leaders and investors around the world are anxiously awaiting the failure of Silicon Valley Bank (SVB) and Signature Bank. On Friday, March 10, SVB, the largest bank for technology startups in the United States, suffered a failure due to a withdrawal of funds worth at least 42 billion US dollars (equivalent to Rp646 trillion).

This was likely triggered by a bank statement last Wednesday that it was seeking USD 2.5 billion (IDR 38 trillion) to strengthen their balance sheet. Meanwhile, Signature Bank, a New York-based cryptocurrency-friendly bank, closed on Sunday 12 March by the US Treasury, Federal Reserve, and FDIC citing systemic risks.

Following the incident, Ripple CEO Brad Garlinghouse announced on March 12 through his Twitter account that Ripple has involvement with SVB as a banking partner, but he stressed that it will not interfere with Ripple's daily business. Garlinghouse ensures that Ripple has a wider network of partner banks and the majority of their funds are stored there.

Ripple has several exposures to SVB - SVB is a banking partner, and keeps some of our cash balances. Fortunately, we didn't expect any disruption to our daily business, and have held most of our USD with a wider network of bank partners," wrote Brad Garlinghouse (@bgarlinghouse) March 12, 2023.

However, investors are still worried about Ripple's funds being deposited in SVB. Garlinghouse did not reveal how much money was stranded in the failed bank. However, Ripple CEO emphasized that the financial system should not be easily affected by these kinds of rumors.

According to a Coinspeaker report, SVB was forced to hand over control of its assets to the FDIC. The regulators reported that they were considering measures to prevent the bank's failure from getting bigger. At the same time, the Federal Reserve announced that it had prepared USD 25 billion in funds to help banks with their liquidity in difficult financial situations.

The Federal Reserve also confirmed that all SVB deposits will be accessible to its customers starting Monday, March 13 and there will be no losses borne by taxpayers. However, shareholders and bonds in SVB and Signature Bank must feel unpleasant consequences. They must bear the destruction of their shares and bonds.

Anxiety over the ongoing banking crisis has caused many investors to question the resilience of the cryptocurrency industry in dealing with it. However, figures and leaders of the cryptocurrency industry insist that their business will not be significantly disrupted and they have a wider bank network to ensure their financial stability.

However, the fall of Silicon Valley Bank and Signature Bank should serve as a reminder that cryptocurrency investment remains at risk like investing in other businesses.