Billions worth of crypto trades at risk as bank shutdowns take toll

economictimes.indiatimes.com:

Silvergate Capital Corp. and Signature Bank — have set off a fresh set of stresses. SVB’s failure triggered a knock-on effect in the crucial market for stablecoins after digital-asset giant Circle Internet Financial Corp., one of the biggest issuers of the widely used tokens known for their perceived safety, revealed it had $3.3 billion of reserves with the bank. The news caused Circle’s token, USD Coin, to slip below its intended 1-for-1 peg with the dollar, sending a shock through the market. On Sunday, regulators in New York closed Signature Bank. As of March 8, the bank still held $16.5 billion in crypto-related deposits. “All depositors of this institution will be made whole,” the regulators said. Against this backdrop, it is still the shutdown of crypto-friendly bank Silvergate — and the shuttering of its electronic payments platform, the Silvergate Exchange Network — that is most weighing on the market.

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For years in the early evolution of crypto, over-the-counter trading desks, hedge funds and other investors that wanted to dabble in crypto had to go through costly, lengthy and clunky contortions just to move funds between digital assets and banks, because the two types of infrastructure weren’t connected. If an investor wanted to wire money from their bank account to an exchange, it could take days via traditional banking channels — often too late to ride the latest market move. Moving funds