The recent bank bailouts in the US have not caused concerns within the crypto community, which has increasingly become intertwined with traditional financial systems. While in the early days of cryptocurrencies there was enthusiasm for the promise of cutting out the banking system from financial transactions, the tension has faded away as digital assets have become more interconnected with the larger financial market. US Federal Reserve System intervention in banks such as Silvergate, Signature, and Silicon Valley Bank (SVB) have saved depositors and been welcomed by the crypto industry.
However, this bailout raises questions of whether the crypto industry has become dependent on traditional banking and whether this interdependence is desirable or not. The overlap between the crypto and startup communities has led to support for the bank bailouts, and there has been no ethical contradiction in the crypto community’s reception of this intervention. Although bailouts have a negative connotation within the crypto community, the need to save valuable institutions bordering on crypto and fiat, especially given the scarcity of such institutions, has been supported.
The blame for banks’ mismanagement during the bank crisis should not be attributed solely to the banks’ executives as the US government invested in governmental notes.