• Silicon Valley Bank (SVB) collapsed on March 10 due to a run on deposits.
• Ripple Labs has come under scrutiny due to its connection to SVB, but CEO Brad Garlinghouse assures that there will be no disruption of business operations.
• The Federal Reserve has established a $25 billion funding program to assist banks with liquidity during times of financial stress and is being called upon to take further action in order to prevent similar situations from happening again.
Silicon Valley Bank Collapse
On March 10, Silicon Valley Bank (SVB) collapsed due to a run on deposits. This news sparked concerns about Ripple’s financial stability and the impact the collapse of SVB could have on its day-to-day business.
Ripple’s Ties To Silicon Valley Bank
Ripple Labs has faced challenges as its connection to Silicon Valley Bank comes under scrutiny. Ripple remains confident in its financial position and reassures its users that its day-to-day business operations will continue without disruption. However, CEO Brad Garlinghouse revealed that the firm had stored some of its cash reserves with the now-failed tech lender, although he did not reveal the full amount that is now stuck in limbo. He assured users that Ripple does not expect disruptions in its day-to-day business as it already held most of its USD with a broader network of bank partners.
The Federal Reserve’s Response
The Federal Reserve has since established a funding program of $25 billion to assist banks with liquidity during times of financial stress. The Federal Reserve also assured depositors of Silicon Valley Bank that they would have access to all of their money starting March 13 and that taxpayers would bear no losses associated with the resolution of Silicon Valley Bank.
Further Action Needed
The Federal Reserve is being called upon to take further action to address the issues that led to the collapse of Silicon Valley Bank and prevent similar situations from happening again.
Conclusion
In conclusion, while Ripple Labs‘ ties with Silicon Valley Bank have caused some concern amongst investors, Brad Garlinghouse was able to reassure them by disclosing how much exposure they actually had and assuring them there would be no disruption in their day-to-day operations thanks largely due the firm holding most of their USD reserves across other banking partners. Meanwhile, The Federal Reserve is taking steps such as providing emergency funds for banks experiencing liquidity issues and reassuring depositors they will have access all their money; however, further action needs still needs be taken in order for such situations from occurring again in future.