Crypto should not be blamed for banking crisis: Charles Hoskinson

ambcrypto.com:

Charles Hoskinson refuted the idea that cryptocurrency caused the banking crisis, calling digital assets the “escape valve.”

Many financial failures and regulatory seizures have occurred in recent weeks. Illiquidity and overpriced assets on balance sheets are two general causes of the issue. Institutions are required to realize losses on inflated assets to cover withdrawals when connected with a run-on deposit. This erodes their balance sheets.

The Fed announced immediate actions to address the issue on 12 March.  Loans up to the par value of held assets will be made available to financial institutions through the Bank Term Financing Program (BTFP), increasing their liquidity.

Hoskinson hinted at the eventuality of banks failing, saying:

“Things that seem permanent and stable, they change quickly, and it’s something that people don’t want to admit, but then after the fact they say that was obvious.”

On his most recent live stream, Hoskinson shared insights about legacy finance. He predicted that banks will inevitably fail, as they are nothing less than a Ponzi scheme, saying:

“You have this business where you take other people’s money; they use that to multiply and create money out of thin air.”

— Charles Hoskinson (@IOHK_Charles) March 20, 2023

He continued, pointing out that this system had led to “evil, disgusting behavior.” Allegedly, TradFi forced a doubling of the money supply in the preceding three years and a 95% decline in the value of the dollar over the previous 100 years. The CEO of Input Output (IO) went on to say that crypto is the “escape valve” from this system since it offers an alternative to its sneaky methods.

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