John Deaton, a lawyer specializing in blockchain technology, recently issued a warning in the form of a tweet, expressing concern that the United States may be left out of the Web3 revolution if its government continues its efforts to restrict cryptocurrencies. Deaton conveyed this opinion as he reacted to the news that the United States authorities had finally stopped the ailing and cryptocurrency-friendly Silvergate Bank operations.
Race to Crypto Revolution
The cryptocurrency attorney is certain that crypto will stay, and the United States risks slipping behind in the race to lead the revolution in cryptocurrency. Given that the United States was rapidly losing its supremacy in terms of the dollar, Deaton stated that the nation had to make haste to ensure it remained in the lead.
Such a misstep. Crypto isn’t going away except away from the United States. At the same time the U.S. Government attempts to snuff out Crypto, USD dominance is weakening and soon the money printer will be back on. This is when the U.S. should be rushing to assure it leads the 🌎 https://t.co/tNXu47mVVM
— John E Deaton (@JohnEDeaton1) March 12, 2023
Sherrod Brown, a senator from the United States, was quoted in a screenshot that went viral last week. In the screenshot, he blamed the insolvency of Silvergate Bank on the volatility of cryptocurrencies, adding that the risk would spread throughout the financial system if proper safeguards were not implemented. According to the statement, “I am continuing to work with my colleagues in Congress and banking authorities to build robust protections for our financial system from the danger of crypto.”
Many specialists disagreed with the senator and said that the bankruptcy of Silvergate Bank was caused by a mismatch between demand deposits and accessible cash and that this discrepancy had nothing to do with the bank’s engagement in cryptocurrency.
Silvergate’s demand deposit dilemma
The CEO of CustodiaBank contended that if Silvergate had held $13.3 billion in cash, the bank run would not have impaired its capital. The report indicated that Silvergate had $13.3 billion in demand deposits but only $1.4 billion. This lack of liquidity could have led to a bank run, causing customers to withdraw their funds and leaving Silvergate unable to meet the demand.
Throughout the discussion, the cryptocurrency lawyer Deaton observed that the governing bodies are not interested in the truth but are more likely to push an alternative narrative that serves their purposes.