CZ, the CEO of Binance, has suggested purchasing the ailing Silicon Valley Bank, which entered into a Federal receivership on March 10 after it had been exposed due to risky lending practices.
The regional bank managed the deposits of several thousand customers including numerous start-ups crucial to the technology sector in California.
As contagion continues to spread from SVB and ongoing distress from crypto-friendly lenders like Silvergate, many crypto firms and VCs are preparing for worst-case scenario spillovers, including several leading exchanges — some of whom have floated the idea of swallowing up banks in the past.
Exchanges swallowing banks
Two days ago, CZ shared a news article from 2022 to his 8.2 million Twitter followers, which included a link to a Yahoo! Finance article stating Binance’s previous intentions to buy a bank.
Is it time yet? Not sure.
https://t.co/IR4XscGw29
— CZ
Binance (@cz_binance) March 11, 2023
Binance has been known to make strategic investments in the past; the crypto exchange has also backed Elon Musk’s acquisition of Twitter.
Meanwhile, Binance is not alone in considering a move into traditional finance; with Kraken has also stating its intentions to open a bank, a move into traditional finance these enigmatic crypto founders believe will lead to the eventual holy grail of Web3 — full decentralization.
Read more: Kraken eyes own bank amid regulatory scrutiny
The collapse of FTX has put crypto-friendly banks under increased scrutiny, with the recent failures of SVB and Silvergate adding to the pressure on these institutions.
CZ indicates ongoing support for stablecoins
The Binance CEO also Tweeted his support for other stablecoins in the broader ecosystem, noting Binance’s recent addition of several stablecoin pairs.
Supporting multiple stablecoins, always. More to come. https://t.co/5W1mHzOjoG
— CZ
CZ worries this is an attack on crypto
CZ also speculated that “it feels like there is a coordinated effort to shut down crypto-friendly banks,” noting the case of Signature as one example, but also noting that the stablecoin system is — ironically — under attack from a bank failure, rather than a crypto failure.
“Banks are a risk to fiat-backed stablecoins,” he added in a follow-up Tweet.
The post Binance CEO CZ ‘Banks are a risk to fiat-backed stable coins’ in reaction to SVB, USDC Depegging appeared first on CryptoSlate.