Cardano founder Charles Hoskinson shared his view on the unstable and volatile banks and how crypto ought to detach itself from these traditional legacy institutions.
In the wake of the recent failure of the banks, Hoskinson raised the need to support new decentralized alternatives.
A user proposed the requirement for a decentralized cryptocurrency bank. The founder of Cardano responded by saying it would be “game over” if it were to happen.
His remarks come after three leading crypto banks collapsed- Silvergate was liquidated, and Silicon Valley and Signature were shut down by regulators, sending investors into a panic mode.
Almost $70 billion of the value of the cryptocurrency industry was lost in only one day.
Bitcoin fell below $20,000 on 10th March, hitting a near-two-month low, caused by the stock market sell-off in the U.S.
Cardano too slid by over 6%. Even if now the majority of these assets have recovered from their losses, the closure of these institutions will have a greater impact on the crypto business.
Mina Tadrus, CEO of quant investment management firm Tadrus Capital LLC and general partner of Tadrus Capital Fund, said.
“These banks enabled cryptocurrency traders and companies to deposit, transfer and convert fiat currency into digital assets such as Bitcoin, Ethereum, and other cryptocurrencies.”
With these banks now defunct, it will become difficult for crypto businesses to move money between entities and access banking services, Tadrus noted.
“Furthermore, such closures could mean reduced trust from investors who may no longer be aware of the necessary safeguards involved in their bank transactions.”
Cardano Founder Remarks Highlights This
According to Tadrus, this might result in a general fall in community engagement, which would ultimately reduce market liquidity and make it challenging for cryptocurrency businesses to develop new products or continue to operate over the long run.
Despite these obstacles, the cryptocurrency sector continues to expand and evolve, with fresh projects and programs starting every day.
About Hoskinson’s recommendation to stop using banks. It highlights the potential for cryptocurrencies to develop new, decentralized alternatives to established financial infrastructure.
It will be interesting to see how the industry handles the regulatory environment as it develops and creates new decentralized financial systems.
Prior to this, Hoskinson cautioned the cryptocurrency community to exercise caution during the banking crisis. In the tweet, the Cardano founder warned crypto investors to avoid over-collateralizing their holdings as they wait for the market to stabilize.