Indian crypto firms see no long-term impact of collapse of three US banks

business-standard.com:

The collapse of Silvergate Bank, Silicon Valley Bank (SVB) and Signature Bank in the US might create temporary liquidity issues but will not have any significant impact on the Indian crypto market in the long run, officials from several exchanges told Business Standard.

All three banks are considered crypto-friendly. SVB offered services such as cryptocurrency custody and lending. Silvergate Bank was well-known for offering banking services to the crypto industry. It created a dedicated platform to enable exchanges and other businesses to retain deposits in multiple cryptocurrencies that could be used to facilitate trades and other activities.

Signature Bank's blockchain-based payments platform, Signet, allowed users to move funds swiftly and without incurring costs.

"This should not have any direct impact on the India-specific crypto market," said Edul Patel, chief executive officer (CEO) and co-founder of crypto firm Mudrex.

"Regarding the Indian crypto market, there may not be a direct risk to Indian cryptocurrency exchanges," said Punit Agarwal, founder of the crypto platform KoinX.

After the SVB was shut down by US regulators on Friday, the crypto market plunged deep into the red. Bitcoin fell below $20,000, and the total crypto market cap touched $914 billion. Over the weekend, crypto firm Circle announced that it had $3.3 billion worth of reserves at SVB. These reserves were maintained for its stablecoin, USD Coin (USDC). USDC plunged to $0.88. It generally trades at par with the US dollar.

However, the Federal Reserve, Federal Deposit Insurance Corporation (FDIC) and the US treasury acted swiftly over the weekend to allay the investors' fears. They issued a statement saying that all depositors will be able to