During an interview on Sunday, American politician and former United States Congressman Barney Frank said that Cryptocurrency is an entity regulator and authorities failed to anticipate back in 2008 when the first Cryptocurrency was launched.
Importantly, Frank noted that cryptocurrencies are “potentially destabilizing” elements, and he elaborated on this statement by saying that digital money was the new element introduced into our system. The existing economic order is being disrupted by introducing a brand-new, disruptive, or potentially destabilizing component. What we have here is a total of three failures.
Frank’s anti-crisis act
Frank is most well-known for his work on the Dodd-Frank Wall Street Reform and Consumer Protection Act, more commonly called the Dodd-Frank Act. This legislation was enacted to reduce the more significant risks associated with the financial sector to prevent another worldwide financial crisis.
Interestingly, the foundation for his present announcement is the recent startling collapse of the three commercial banking titans. On March 10, the New York Department of Financial Services (NYDFS) commissioner, Adrienne A. Harris, announced that the state had assumed control of the New York-based Signature Bank.
Notably, the collapse of the crypto-friendly partner of the Signature Bank, Silvergate Capital, and the seizure of the banking corporation Silicon Valley Bank came after the closure of the Signature Bank.
Frank’s insight: Finance 2023
According to Frank, the financial scene has changed significantly over time. He stresses a lessened sensitivity to future market shocks when comparing the present financial system of 2023 to that of 2008. Although recognizing the crypto industry’s influence on banking, Frank thinks the two are not necessarily mutually destructive. He believes they are not systemically harmful despite some negative implications for a few people.
Frank, who is on the board of directors of Signature Bank, said once again that the financial institution’s customers may have misjudged the bank’s level of exposure to Cryptocurrency.