Ava Labs president John Wu discussed recent developments and made predictions about the future.
The head of development firm Avalanche (AVAX), who asked Bloomberg’s Caroline Hyde to comment on Silvergate Bank’s shutdown, argued that the Silvergate Bank bankruptcy put cryptocurrencies in a much more difficult process. John Wu said about the potential consequences of the Silvergate Bank bankruptcy, which acts as a bridge between the traditional banking system and crypto;
“Obviously, it will be much more difficult for all intermediaries, institutions, and individuals to remove their way into the crypto ecosystem one by one. Regulations, bad actors, or negativity like in the Silvergate case will complicate things. So it’s not easy at all. That makes it harder.”
According to Wu, the move of crypto firms outside of the United States could be one of the consequences of banks and other intermediaries stopping serving the digital asset industry. If crypto companies do not have their headquarters working with banks, they will have to do so, and it will become even more difficult for the huge investor community in the US to access cryptocurrencies.
“The problem is that if there are no middlemen to help new institutions enter this space, it will delay the growth of this space. Another problem is that even healthy balance sheets in this space need little things. Crypto is a fintech business. Legitimate businesses need banking services that pay people. “If we remove the banks that help these companies do this, we remove the desire for companies to be onshore. And unfortunately, US companies will move overseas for banking services and other things they need to continue their operations.”
The head of Ava Labs says the best way forward is for the crypto industry to engage with regulators and lawmakers.
“I think we need to have a healthy dialogue. If that happens, you’re bringing back capital markets and innovation. Otherwise, things will continue to shift overseas because of certainty, rules and regulations. And this is happening in Europe, even in Asia.”