Binance CEO CZ ‘Banks are a risk to fiat-backed stable coins’ in reaction to SVB, USDC Depegging
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.
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 🔶 Binance (@cz_binance) March 11, 2023
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 disk to fiat-backed stablecoins,” he added in a follow-up Tweet.
The recent failures of crypto-friendly banks, such as SVB and Silvergate, have further highlighted the need for stablecoins to hedge against traditional finance risk.
With CZ’s statements and actions suggesting that he recognizes the potential risk of stablecoins existing within traditional finance, he seems to doubling down on his support for other stablecoins and the broader stablecoin ecosystem as a whole.
This would seem indicate that he sees stablecoins as a valuable asset and something that should be defended from traditional financial industries, some of whom have a vested interest in seeing entities such as stablecoins fail.
What’s clear is that the crypto industry continues to evolve and either integrate or disintegrate with traditional finance and, as such, stablecoins are likely to play an ongoing role in whatever future dynamic of crypto will emerge in the future.