The Silicon Valley, the beating heart of technological innovation, has an ambivalent relationship with cryptocurrencies. On the one hand, many of the companies that make up Silicon Valley have been instrumental in the development of blockchain technologies and cryptocurrencies such as Bitcoin, Ethereum, and Ripple. On the other hand, many of these same companies have been hesitant to accept cryptocurrencies as a form of payment. This reluctance seems to have increased following the Silicon Valley Bank crash. And it is precisely in relation to this crisis that the US Commission has called on the Fed to apply more stringent rules regarding financial authority.
The main challenge that Silicon Valley is facing in relation to cryptocurrencies is that of regulation. In many countries, cryptocurrencies are not yet legally recognized as a form of payment. The lack of regulation has meant that many companies hesitate to adopt them. However, there are signs of change: for example, Tesla CEO Elon Musk recently announced that the company will accept Bitcoin as a form of payment for its vehicles.
But the issue of regulation is only one of the problems that Silicon Valley is trying to solve. Cryptocurrencies still have a controversial public image, often associated with cybercrime and tax evasion. Many investors and consumers are still uncertain about how to use them safely and conveniently.
What happened with the Silicon Valley Bank only worsens this type of belief.
This week, the US Congress held hearings to determine the role of regulatory authorities in recent bank failures. One question that deserves to be explored is the role of the Federal Reserve Bank of San Francisco in the Silicon Valley Bank crash.
For this reason, the vice chairman of the Fed, Michael Barr, and Martin Gruenberg, head of the FDIC, were heard. Barr, in his testimony reported by Sole24Ore, said:
"It's a textbook case of mismanagement. The bank failed because it did not appropriately address the risk associated with interest rates and liquidity."
The supervisor then stated that Silicon Valley Bank had been asked to review its work as early as November 2021.
To reassure the most critical among the Senators, led by Democrat Elizabeth Warren, Barr has made it known that the Fed and the FDIC already have all the necessary tools to carry out the checks and to intervene where similar problems may arise without additional laws.
Viola Meacci, student of Biomedical Engineering at the University of Pisa, has always been interested in the world of journalism. In her job, she explored the world of blockchain, cryptocurrencies, NFT and metaverse which she now very is passionate about it .