Regulators Blaming Cryptocurrency as Scapegoat for Banking Failures

03/16/2023 04:09 • Crypto & Markets • 66 views

According to reports, Cathie Wood, founder of ARK Invest, stated on Twitter that cryptocurrency had not led to the bankruptcy of Silicon Valley banks and Signature, and that the “culprit” was the Federal Reserve. Due to the shortage of venture capital funds and the high yield of money market funds, deposits have left the US banking system. Cathie Wood believes that regulators use cryptocurrency as a scapegoat for their regulatory failures in traditional banking.

Cathie Wood: The Federal Reserve is the “culprit” in the bankruptcy of Silicon Valley banks and Signature

Analysis based on this information:

According to Cathie Wood, the founder of ARK Invest, regulators are blaming cryptocurrency for traditional banking failures. Wood believes that cryptocurrency has not led to the bankruptcy of Silicon Valley banks and Signature but rather the “culprit” is the Federal Reserve. Reports suggest that due to the shortage of venture capital funds and the high yield of money market funds, deposits have left the US banking system.

The high yield of money market funds makes them an attractive option for depositors, including corporations and consumers. As a result, banks are losing deposits to other financial institutions. In addition, the shortage of venture capital funds makes it challenging for new businesses to secure funding, leading to a decrease in economic growth.

Wood asserts that regulators use cryptocurrency as a scapegoat for their regulatory failures in traditional banking since the sector is beyond the government’s direct control. The failure of large banks in the US can be attributed to weak regulations and incorrect governmental policies that directly affect the banking industry, Wood added.

Cryptocurrency is often portrayed as a risky investment with high volatility and risk of fraud. However, proponents of cryptocurrency argue that it offers a decentralized system that is beyond the reach of government control. It is important to note that while cryptocurrency has attracted a lot of attention and investment, it is still a relatively new technology with several unknowns.

In conclusion, Wood’s assertion that cryptocurrency isn’t to blame for the issues in the banking industry raises significant questions about regulatory failings. It is time for regulators to take responsibility for their role in the systemic failures in the banking sector, instead of scapegoating cryptocurrency. It is critical for policymakers to reflect on the broader implications of a lack of regulation concerning traditional banking policies, such as deposit insurance and systemic risk. The banking industry requires regulatory protection to safeguard its customers’ investments, and it is the responsibility of the regulators to ensure that they can deliver.

In conclusion, the banking industry’s failures are a result of governing policies, regulations, and predatory practices, and it is high time for the government to initiate reforms instead of pointing the finger at cryptocurrency.

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Regulators Blaming Cryptocurrency as Scapegoat for Banking Failures

Cathie Wood: The Federal Reserve is the “culprit” in the bankruptcy of Silicon Valley banks and Signature

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