Former Congressman Barney Frank Comments on Crypto and Banking Industry
Former United States Representative Barney Frank commented in an interview on Sunday that cryptocurrency is an entity that regulators and authorities failed to reckon with back in 2008 when the first cryptocurrency was introduced. Frank stated that cryptocurrency is a “potentially destabilizing” element and introduced a new and destabilizing component into the financial system.
Frank is known for the Dodd-Frank Wall Street Reform and Consumer Protection Act, which aimed to reduce excessive risks related to the financial sector and prevent a global financial crisis. His current proclamation is rooted in the recent shocking collapse of three commercial banking giants. On March 10, Adrienne A. Harris, the superintendent of the New York Department of Financial Services (NYDFS), announced that New-York-based Signature Bank (NASDAQ:SBNY) had been taken over by the department.
The closure of Signature Bank followed the failure of its crypto-friendly companion, Silvergate Capital (NYSE:SI), and the seizure of the banking company Silicon Valley Bank (SVB). Frank added that the financial system of 2023 is less vulnerable than that of 2008, but the crypto sector still has a significant impact on the banking industry. However, Frank stated that the two industries are not mutually destructible, and the negative consequences have been unfortunate for some but are not systemically problematic.
As a board member of Signature Bank, Frank reiterated that the bank’s exposure to crypto may have been overestimated by its clients. The comments of former Congressman Barney Frank suggest that crypto has become an integral part of the financial system that regulators need to monitor to prevent potential destabilization.
