U.S. Treasury Secretary Janet Yellen on Thursday will testify before the U.S. Congress about the banking crisis after regulators closed three crypto-friendly banks Silvergate, Silicon Valley Bank, and Signature Bank.
Treasury Secretary Janet Yellen in a scheduled testimony on March 16 looks to reassure the U.S. Senate Finance Committee that the banking system, depositors, and investors are safe. The instability in the banking sector for long periods and contagion reaching other banks raises questions about the regulation of the sector by regulators.
“I can reassure the members of the committee that our banking system remains sound, and that Americans can feel confident that their deposits will be there when they need them,” according to a text of Yellen’s prepared remarks reported by Bloomberg.
The regulators including the Treasury Dept, Federal Reserve, and FDIC said the action by regulators seeks to protect depositors of the failed banks. Bitcoin critic Janet Yellen will defend the measures taken by regulators to manage the situation and emergency funding to bailout banks. However, shareholders and debtholders are not protected by the government.
Regulators Blaming Crypto for Banking Crisis
The crypto industry seeks answers on why regulators are blaming crypto for the banking crisis in the U.S. and cutting ties with the banking sector under Operation Choke Point 2.0.
Regulators have asked banks to submit bids for acquiring Silicon Valley Bank and Signature Bank, but want the buyer to give up all the crypto business.
Ark Invest CEO Cathie Wood and other crypto influencers assert that crypto had nothing to do with the banks’ investment decisions, nor the Fed’s decision to increase interest rates that caused bank capitulation. Crypto will move offshore, depriving the U.S. of blockchain and crypto innovations.
Bitcoin price will continue to rise amid the banking crisis as people moves their money to crypto due to losing confidence in banking sector. In fact, Bitcoin was created as a result of the financial crisis in 2008 to have a decentralized financial system.
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