Digital Currency Group (DCG) is reportedly looking for new bankers for its portfolio companies following three high-profile bank failures.
The cryptocurrency company has found through its search that lenders such as Santander, HSBC and Deutsche Bank are still willing to connect with crypto companies, CoinDesk reported Tuesday (March 14).
PYMNTS has reached out to DCG but has not yet received a response.
DCG’s efforts come as a number of crypto and tech companies are looking for new banks following the recent collapses of Silicon Valley Bank, Silvergate Capital and Signature Bank, the latter two financial institutions that had become known for their work in the crypto sector.
The report, which cites internal DCG messages, says the company — CoinDesk’s parent — has also contacted JPMorgan, Bank of America and BlackRock.
However, this doesn’t mean the banks will welcome crypto companies with open arms, the report says. The messages say the banks could restrict some services such as brokerage and the ability to wire money to third parties. Banks could also set up restrictions based on the level of crypto exposure.
As PYMNTS reported Monday (March 13), industry observers have said that the essential de-banking of crypto from 24/7 real-time payment rails could leave the industry with little recourse but to take their banking business overseas.
“But this is not the answer and leaders should remember that in all banks, the depositors are and have always been, safe in this country,” Edwards told PYMNTS’ Karen Webster. “They should pick the best partners and not make broad reactive judgments around pure size.”
As reported here recently, the SVB news has already spurred investors to send shares in other banks lower, with even titles like JPMorgan and Citigroup seeing their prices drop as investors embrace defensive positions against banking names.
The more difficult question, Edwards stressed, is what these banking failures will mean for future innovation.
“How will the investor community react to the SVB void and what will the impact be on the next wave of innovation?” he asked.
“Just like a recession is inevitable, and rising and falling interest rates are inevitable, some sort of reset here was inevitable. The environment we are in has changed — just like what happened in 2000 and 2008,” Edwards said, adding that the companies that can adjust will survive and continue to innovate as long as they stick to a “near-term path to profitability.”