Dan Finlay is one of the co-founders of MetaMask, a well-known crypto wallet service that lets users access decentralized web3 applications.
Finlay stated in an interview on the block that consumers not feeling comfortable owning crypto is the industry’s “biggest plague” and explains what MetaMask is working to remedy the issue.
Crypto and financial markets booming following the bank collapse
The unpredictability around bank closures sparked speculative panic among investors, resulting in large transactions as people seeking stability.
According to Dan Finlay, MetaMask group manager, others responded by making significant moves because they were unsure who they could trust. Finlay commented on a forthcoming episode of The Scoop podcast with Frank Chaparro.
The company behind the USDC stablecoin, Circle, said on March 10 that it had $3.3 billion in reserves at Silicon Valley Bank (SVB), which was shut down by state regulators the same day. As a result, many users started to worry that the value of their stablecoins may decrease, driving down prices.
DAI’s value also fell because of how strongly it depends on USDC for backing.
Finlay, the CEO of Metamask, claimed that the recent increase in business resulted in the company earning about $1.5 million in swap fees. He added that it is a good sign for the business that more and more people are switching to crypto and abandoning it under various circumstances.
People view cryptos and recognize their potential even amid systemic upheavals. As a result, the current scenario may be viewed as “very positive” for the crypto market even though it may contain certain systemic dangers.
The cost of cryptos has increased since the recent failure of two big banks. In response to mounting worries about the viability of the banking system, bitcoin and ethereum saw notable rises.
Bitcoin increased by 34% from its pre-SVB collapse on March 10 to a staggering $26,400 on March 14. Like bitcoin, ethereum also experienced an increase in value, reaching $1,780 earlier in the day, up 29% from the March 10 low.
Silicon Valley Bank (SVB), a startup lending organization, was taken over by regulators on March 10, marking the most significant bank failure in the United States since the 2008 financial crisis. SVB had incurred huge losses due to interest rate hikes by the Fed and a group of depositors wanting to withdraw their assets.
As a result, SVB was pressured to sell investments at a considerable loss, which sparked panic among other depositors and led them to withdraw their money.
As a result of this panic, another organization, Signature Bank, was shut down, and regional bank stocks fell on March 13. Although this was the case, the federal deposit insurance corporation (FDIC) assured depositors that their money was safe.
Banking regulators established a plan over the weekend to rescue depositors with funds in SVB, which was on the verge of failure. This move was critical in averting a financial panic.
Depositors at New York’s Signature Bank, similarly closed due to worries about systemic contagion, will have full access to their funds. Signature Bank was a major source of finance for bitcoin companies.