Why Tokenized Assets Are Safer During a Banking Crisis
Recent U.S. bank failures exposed a strange truth: depositing your money on-chain is safer than trusting banks to make good on your holdings, argues Copper’s Fadi Aboualfa....
- The author, Fadi Aboualfa, shares his personal experiences with banking crises in Greece, Cyprus, and Lebanon.
- He highlights that these crises were not predicted and discusses the failed risk governance of banks.
- The author mentions the recent failures of banks in the U.S. and the intervention of the Federal Reserve through the Bank Term Funding Program (BTFP).
- Circle, the issuer of USDC stablecoin, faced de-pegging due to the loss of banking services.
- The author suggests that holding a de-pegged USDC or other digital assets during a banking crisis may be safer than cash deposits with limited insurance coverage.
- He mentions the development of options like tokenized bonds and money market funds on blockchain markets.
The overall sentiment of the article is negative, as the author discusses the negative impact of banking crises and the risks associated with traditional cash deposits.