CZ speculates on government’s plan to take down banks; Circle responds to SVB Fall

Binance BNB/USD CEO Changpeng Zhaopopularly known as “CZ” in the cryptocurrency community, has raised concerns over the recent shutdown of cryptocurrency-friendly banks, stating that it feels like there is a coordinated effort by the US government to shut down such banks.

In a tweet, CZ pointed out the recent demise of two of the most prominent cryptocurrency-friendly banks, Silvergate SAY and Silicon Valley Bank, subsidiary of SVB Finance Group SIVBand speculated that the US government may be behind their shutdown.

While the banks may have been closed, CZ emphasized that the blockchains are still operational, indicating that bank closures will not affect the overall functioning of the cryptocurrency industry.

However, this development has raised concerns in the cryptocurrency community, particularly regarding the future of crypto-friendly banks in the United States

CZ’s tweet has received widespread attention and support from the cryptocurrency community, with one Twitter user saying that only CZ can lead the community out of this darkness.

However, CZ reiterated that a decentralized ecosystem works better without a leader and there is no need for leaders in the cryptocurrency industry.

Meanwhile, Circle Internet Financialthe company behind stablecoin USDC/USDhas announced that it will cover any potential shortfall in the assets backing its stablecoin, in the event that it does not receive the entire $3.3 billion cash reserve it was holding at Silicon Valley Bank.

Also Read: Binance And Coinbase Scramble To Stop USDC Conversions Amid Silicon Valley Bank Chaos

This comes after the Federal Deposit Insurance Corporation (FDIC) seized SVB’s assets on Friday, resulting in concerns over the value of USDC.

USDC is a stable coin that is supposed to be pegged to the US dollar, but its value had fallen after the SVB collapse.

In a blog post on Saturday, Circle said it would “stand behind the USDC and cover any shortfalls using corporate resources, involving external capital if necessary.”

Circle also revealed that it had been trying to move its assets out before SVB’s collapse and that the transaction could be settled on Monday when US banks resume normal operations.

However, Circle also noted that it is possible that SVB may not return 100% and that any return may take some time, as the FDIC issues IOUs and advanced dividends to depositors.

The value of stablecoin USDC had fallen as low as $0.88 in the past 24 hours, but rebounded to $0.97 after the announcement, according to Coingecko.

Next: Circle’s funds could be at risk as California regulators shut down Silicon Valley Bank