CZ Speculates On Government Plot To Take Down Banks; Circle Responds To SVB Fall

Binance BNB/USD CEO Changpeng Zhao, popularly known as “CZ” in the cryptocurrency community, has raised concerns over the recent shutdown of cryptocurrency-friendly banks, stating that it feels like there is a coordinated effort by the U.S. government to shut down such banks.

In a tweet, CZ pointed out the recent downfall of two of the most prominent cryptocurrency-friendly banks, Silvergate SI and Silicon Valley Bank, subsidiary of SVB Financial Group SIVB, and speculated that the U.S. government might be behind their shutdown.

Pure speculation. It almost feels like there is a coordinated effort to shutdown crypto friendly banks.

Result?

Banks are shut down.
Blockchains still running.

— CZ 🔶 Binance (@cz_binance) March 11, 2023

While the banks may have been shut down, CZ emphasized that the blockchains are still operational, indicating that the shutdown of banks will not affect the overall functioning of the cryptocurrency industry.

However, this development has raised concerns in the cryptocurrency community, especially regarding the future of crypto-friendly banks in the U.S.

CZ's tweet has received widespread attention and support from the cryptocurrency community, with one Twitter user stating that only CZ can lead the community out of this darkness.

However, CZ reiterated that a decentralized ecosystem works better without a leader, and there is no need for leaders in the cryptocurrency industry.

No need for leaders in a decentralized ecosystem. It just works. In fact, it works better without a leader. We are just part of it.

— CZ 🔶 Binance (@cz_binance) March 11, 2023

Meanwhile, Circle Internet Financial, the company behind the stablecoin USDC/USD, has announced that it will cover any potential shortfall in the assets that back its stablecoin, in the event it does not receive the full $3.3 billion cash reserve it was held at Silicon Valley Bank.

Also read: Binance And Coinbase Scramble To Halt USDC Conversions Amid Silicon Valley Bank Chaos

This comes after the Federal Deposit Insurance Corporation (FDIC) seized SVB's assets on Friday, resulting in concerns over the value of USDC.

USDC is a stablecoin that is meant to be pegged to the U.S. dollar, but its value had fallen following the SVB collapse.

In a blog post on Saturday, Circle stated that it would "stand behind USDC and cover any shortfall using corporate resources, involving external capital if necessary."

Circle also revealed that it had attempted to move its assets out before SVB's collapse and that the transaction could settle on Monday when US banks resume normal operations.

However, Circle also noted that it is possible that SVB may not return 100% and that any return might take some time, as the FDIC issues IOUs and advanced dividends to deposit holders.

The value of the stablecoin USDC had fallen to as low as $0.88 in the last 24 hours but rebounded to $0.97 after the announcement, according to Coingecko.

Next: Circle's Funds Could Be In Jeopardy As California Regulators Close Silicon Valley Bank