After back-to-back collapses of three big banks in the United States, the Silvergate bank, the SVB, and the Signature bank cautioned the US agencies. After witnessing the fall of banks, US-based companies started looking towards the European region to decentralize their functionaries.
According to reports, the United States-based crypto exchanges shifted their focus to European region banks, Switzerland which are famous for their banking structure and currently the most preferred location for these firms. To protect themselves from any unforeseen collapses in the future various major banks decided to move their functions from the United States.
The report looks more authentic after the managing director of SEBA bank, Yves Longchamp, informed that there’s a strong increase in traffic to the bank’s website from the United States after the collapse of three big banks. Additionally, a few US firms have started the onboarding process but have not made any official announcement regarding this.
The U.S. companies looking to open accounts in the previous few weeks as concerns about Silvergate rose. According to the Swiss-based Arab Bank, the companies are primarily cryptocurrency funds or engaged in crypto venture capital. Almost 80% of them, according to Rani Jabban, head of treasury and financial institutions at Arab Bank, had been Silvergate clients.
The future of these crypto banks based in the United States is still in darkness and nobody knows what will happen. But for the sake of safety, first approach firms are trying to do everything they can. It will be exciting to see which firms will diversify their functions from the United States to other countries. In the end, the collapses of three banks alerted the related companies to look into different options available in the market.
Many countries around the world like Singapore, Switzerland, and several other Asian countries are also witnessing high traffic on their websites from United States clients. The banks of these countries are also hesitant in opening accounts of these crypto banks based in the United States because of the risk associated with it.
Some people were speculating that the collapses of banks in the United States could bring another 2008-type recession. However, the US Treasury, FDIC, and Federal Reserve Board declined these concerns raised by people. The regulatory bodies reassure that there’s no such situation as the 2008 recession where millions lost their jobs and inflation was at 10%. The reasons given by the United States Treasury were stricter laws and increased capital requirements after the 2008 crisis.