Bank collapses are spurring interest in self-custody startups
The collapses of Signature Bank and Silicon Valley Bank have left many people in disbelief, with skeptics questioning the stability of the traditional financial system.
Cryptocurrency, sadly, did not do much to capitalize on that skepticism, considering Bitcoin (BTC) tanked at the first sign of trouble for USD Coin (USDC), which briefly lost its peg to the dollar.
Still, the crisis also provided a golden opportunity for the crypto industry to demonstrate its resilience and offer viable alternatives. As faith in the traditional banking system wanes due to SVB causing “a crisis in confidence,” venture capital (VC) firms and startups are increasingly embracing self-custody solutions for digital assets, ensuring that individuals maintain full control over their funds.
The shift toward self-custody and decentralized finance (DeFi) systems is indicative of a larger trend that sees more people embracing cryptocurrencies and the principles of financial sovereignty. This increased interest in decentralized solutions is fueling innovation and investment in the space, which is ultimately good for both the crypto ecosystem and the broader financial landscape.
Related: Let First Republic and Credit Suisse burn
Some readers may find the notion of celebrating a bank’s collapse objectionable, arguing that it undermines the credibility and importance of established financial institutions. Additionally, others may argue that the promotion of cryptocurrencies and self-custody can be viewed as opportunistic, capitalizing on a crisis to advance a particular agenda.
The current financial landscape is undergoing a major transformation, with many people expressing distrust in traditional financial institutions. A recent survey revealed that
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