Bank AS Kolaps, Cryptocurrency Becomes A Black Goat

Illustration of various kinds of Cryptocurrencies. (Photo; Doc. WccfTech)

JAKARTA - Recently, Senator Michael Bennet of Colorado expressed his views regarding the closure of the cryptocurrency-friendly bank, Signature Bank. The bank closed with interference from the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC).

According to Bennet, the bank with its cryptocurrency clients did not make a "pridentially sound" decision while operating. For information only, "prudently sound" is a term used to describe an action or decision made by a financially responsible institution or company and consider all possible risks.

On the occasion of speaking before the Senate Financial Committee on Thursday, March 16, Bennett drew a comparison between bank relations and cryptocurrency companies and cannabis institutions and stores. However, this view is not fully supported by all US legislators, as there are some who believe that cryptocurrencies are being used as scapegoats in banking policies that have failed by the Federal Reserve.

According to him, Signature Bank failed because nearly 20 percent of its deposits came from cryptocurrencies. In fact, the bank is prohibited from dealing with cannabis companies, in fact, it blames cryptocurrencies for being unstable and elusive.

Even so, not all members of the congress have the same views on the closure of the Signature Bank. Former US House of Representatives member Barney Frank recently said that prior to the actions taken by the New York Department of Financial Services (NYDFS), there was no problem with Signature Bank solvency.

On Wednesday, March 15, US congressman Tom Emmer wrote a letter to FDIC chairman Martin Gruenberg questioning several reports showing the agency had used the bank as a weapon to attack the cryptocurrency industry. He assessed that this kind of action could have a negative impact as it would push the companies into irregular, unstable, and unsafe markets.

Ark Invest's Cathie Wood also responded to Tom Emmer's letter stating that he also believes "regulators use cryptocurrencies as scapegoats for negligence in supervising their own traditional banking".

Wood blamed the Fed's policy as the main cause behind last week's bank failures. According to him, cryptocurrencies can be a solution to the failure of the center, darkness, and regulatory errors in traditional financial systems.

In his view, crypto has become a scapegoat for policy errors, and this could see cryptocurrencies migrate overseas, harming the US as one of the most important innovations in financial history.