The Banking Domino Effect: Good for Blockchain & Web3?
For decades, banks of all shapes and sizes have dominated the landscape and been perceived as rock-solid financial institutions for safe and secure money storage. Despite constant outcries from skeptics of fractional reserve banking and other red flags, consumer trust and confidence in the traditional banking industry seems to have remained steady.
But now we’re starting to see a crack in the armor, the first since 2008 - over the last few months, it’s become increasingly bigger. Enter the global banking collapse of 2023.
This year has started off with several major bank crises that have completely shaken the landscape, institutional and retail consumers alike. A recent article by Reuters breaks this down well, providing a detailed key timeline of events and how this all unfolded.
The shutdown of SVB (Silicon Valley Bank) took place in early March, sending shockwaves across both the traditional and crypto industries (also a catalyst for $USDC’s de-pegging). - it was the 16th largest bank in the US and had roughly $209 billion in assets in December 2022. Just a few weeks later, Credit Suisse and Charles Schwab also got with FUD, causing their stock prices to plummet - although their future isn’t certain, things aren’t looking good for these major players.
I think the big question here is, are we out of the woods with the Federal Reserve starting to step in or will we see more pain over the months and years to come? If it’s the latter, which banks will be the next victims? On a broader scale, could this be the beginning of the big financial collapse everyone’s been talking about?
From my perspective, it’s hard to completely nail down, but I think it’s going to be more downhill from here as a chain reaction from what we’ve just witnessed in March. On a positive note, to many people’s surprise, Bitcoin and the crypto industry are reacting positively to this news, so this may just be the environment blockchain needs to thrive and make itself known to the masses.
Blockchain technology and cryptocurrencies were designed to provide users with an alternative to the traditional banking system, letting people control their own money however they please. I’ve always been passionate about blockchain and saw its value from the second I discovered it - my thoughts are that this is the triggering event for viral adoption.
Damir Horvat
