"This is what happens when you focus too much on one thing until you forget the other."
The Chief Executive Officer (CEO) of Ark Invest, Cathie Wood thinks that the actions of the regulators are too focused on cryptocurrencies which has caused them to miss the problems that happened in banks such as the recent collapse of Silicon Valley Bank (SVB).
In addition to crypto companies being required to comply with United States (US) regulations, the country's regulators in recent months have warned banks not to provide services to digital asset-backed firms.
Following that, Cathie said regulators should focus on traditional banking systems instead of decentralized digital assets following the crypto market's survival even during the banking crisis.
It is understood that the US Federal Reserve (Fed) has fully protected SVB's deposits after the regulator took over the bank which suffered a drastic collapse.
Cathie claims that traditional banking is affecting crypto, rather than the other way around as instability in the banking system has negatively impacted stablecoins including DeFi.
This is because USDC, the main stablecoin tied to the US dollar, has fallen to $0.90 when $3.3 billion of its reserves were tied up in SVB, but is now recovering at $1.
It is well known that bank failures are capable of preventing crypto companies from converting digital assets into fiat currencies.
