A US Treasury official says the financial institution’s efficiency shouldn’t be blamed on the crypto sector

Nellie Liang, US Treasury Undersecretary for Home Finance, stated the cryptocurrency business just isn’t accountable for the enforcement of Silicon Valley Financial institution (SVB) and Signature Financial institution.

Liang made the assertion throughout a listening to earlier than the Home Monetary Providers Committee on Wednesday, saying she didn’t imagine cryptocurrencies had a direct function within the collapse of the 2 banks. Requested if digital property have been an oblique issue, she stated Signature Financial institution is especially energetic within the house, with out elaborating.

Earlier, the chairman of the US Federal Deposit Insurance coverage Company (FDIC), Martin Grunberg, stated that by the top of 2022, about one-fifth of Signature Financial institution’s deposits shall be associated to cryptocurrency clients.

Liang’s feedback come as regulators and lawmakers more and more scrutinize the cryptocurrency business for potential dangers to monetary stability.

Lately, banks SVB and Signature Financial institution have raised considerations in regards to the banks’ publicity to the cryptocurrency business, which is understood for its volatility and lack of regulation.

Nonetheless, Liang’s remarks counsel that the cryptocurrency business shouldn’t be solely blamed for the financial institution’s efficiency. As a substitute, regulators and banks themselves ought to take a more in-depth have a look at their threat administration practices to make sure they’re adequately ready for any potential disruptions in monetary markets.

Members of the cryptocurrency business welcomed Liang’s feedback, saying they’ve a nuanced understanding of the function digital property play within the monetary system. In addition they emphasised the business’s dedication to working with regulators to deal with monetary stability considerations.