Cardano Price News: Cardano founder Charles Hoskinson made subtle remarks over the ongoing crisis surrounding the failure of Silicon Valley Bank and the Signature Bank. He made the comment in the wake of yet another sharp fall in US bank stocks despite the US regulators taking measures to preserve liquidity for the protection of the banks’ customers. The bank stocks rout coincided with an aggressive rise in Bitcoin price, leading to a much needed positive momentum in the crypto market.
Also Read: Ripple Funds Stuck In Collapsed Silicon Valley Bank? Garlinghouse Replies
Charles Hoskinson Compares Crypto Collateral To Banks’ Liquidity
Hoskinson made the comment in context of the manner in which traditional banks handle their reserve assets. This comes at a time when crypto based businesses face scrutiny over their cash reserves management. The Cardano founder brought up the way in which stablecoin issuers manage their collateral as against the banks. For example, Tether claims that USDT is backed in excess of 81% by cash and cash equivalents. The company also said it holds total excess reserves of $960 million.
He referred to the criticism faced by crypto companies even in the instance where they hold collateral in cash and treasury bills. On the other side, the Silicon Valley Bank crisis stemmed from its investments in government bonds.
Also Read: Bitcoin Price Soars As US Bank Stocks Halt, Will BTC Break $25K?
In the case of USDC issuer Circle, which had a $3.3 billion exposure to the Silicon Valley Bank, it outlined a recovery plan. The plan involves utilizing its corporate resources to cover shortfall in the reserves. The move came after USDC price depegging from the $1 value following the bank’s sudden shutdown last week. With this, the stablecoin is now almost back to normal in terms of repegging. At one point, USDC lost around 13 cents per token in value. Meanwhile, the Cardano price (ADA) is up by around 15% in the last 24 hours.