• The U.S. government announced a joint statement from the Treasury, Federal Reserve and FDIC to resolve issues at Silicon Valley Bank and Signature Bank.
• The president of the U.S. also took to Twitter to share his perspective on strengthening oversight and regulation of major financial institutions.
• Paxos and Circle responded with confirmation that their stablecoin reserves were fully collateralized, secure, and could be redeemed by customers at a 1:1 ratio with the U.S. dollar.
The U.S. government came to the rescue of failed banks with a joint statement from the Treasury, Federal Reserve, and FDIC (Federal Deposit Insurance Corporation). It confirmed that the Silicon Valley Bank issue would be successfully resolved with the approval of the U.S. Treasury Secretary, Janet Yellen and declared an equivalent risk exception for Signature Bank, ensuring all depositors would be fully reimbursed without any burden on taxpayers for resolving these banks. The President of the United States also took to Twitter to share his perspective on strengthening oversight and regulation of major financial institutions in response to this crisis situation faced by USDC and BUSD crypto markets due to collapse of Signature and Silicon Valley Banks over the last few days .
Paxos & Circle Respond
Following this announcement by the government, it was confirmed by Paxos team that their stablecoin reserves were completely collateralized which can be redeemed by customers at a 1:1 ratio with USD currency as 90% of their reserves were held in U.S treasury bills or overnight repos which means there is no real threat to their stablecoins while Jeremy Allen from Circle team too took twitter ensure holders that their assets are absolutely secured .
Criticism From Crypto Community
The crypto community was vocal in criticizing this bailout plan proposed by US government as they believe it did not solve much problem rather added more complexity instead creating ambiguity surrounding these coins especially those related to USDC & BUSD markets which has been significantly impacted due such situations over last few days .
The response provided jointly by various governmental bodies such as Treasury ,FDIC & Federal Reserve tried its best tackle challenges being faced by banks & depositors however whether it will prove beneficial or not still remains open question amidst criticism from crypto community .
• The White House released a joint statement from various governmental bodies like Treasury ,FDIC & Federal Reserve assuring full reimbursement for depositors without any burden on taxpayers for resolving these banks issue related to Signature Bank & Silicon Valley Bank • Paxos & Circle responded confirming that their respective stablecoin reserves are completely collateralized ,secure & can redeemed at 1:1 ratio against USD currency . • However ,the crypto community criticized this bailout plan claiming it did not solve much problem rather added more complexity around USDC/BUSD markets amid significant impact over last few days due such occurrences .