Gabor Gurbacs: Regulators should not promote banks’ custody of digital assets in the future

According to reports, Gabor Gurbacs, director of digital asset strategy of VanEck, an investment management company in New York, said on social media that FDIC had sealed up banks in Silicon Valley and controlled their deposits. Regulators should not promote the custody of digital assets by banks in the future. Hundreds of billions of dollars of banks go bankrupt and swing more than 10-30% in a few days, which will not inspire people’s confidence in the system.

Interpretation of this information:

In a social media post, Gabor Gurbacs, the director of digital asset strategy of VanEck, has shared his concerns regarding the custody of digital assets by banks in the future. He stated that the FDIC has sealed up banks in Silicon Valley and controlled their deposits, indicating that the regulatory body may be taking a more restrictive approach to banks handling digital assets.

Gurbacs also highlighted the volatility of traditional banking institutions, stating that they can go bankrupt and swing more than 10-30% in just a few days. This volatility can negatively impact people’s trust in the banking system, especially if digital assets are involved.

The message suggests that while the idea of traditional banks being involved in digital assets may be appealing, the potential risks and volatility may outweigh the benefits. Given the volatile nature of digital assets and the uncertainty surrounding regulations, Gurbacs believes that it is not ideal for banks to take the lead in custody services for digital assets, at least for the time being.

The three keywords that summarize the message are:

1. Digital Asset Custody: The message suggests that there may be concerns around traditional banks providing custody services for digital assets. As digital assets are still a relatively new and untested asset class, there may be potential risks that are difficult to manage, especially given the volatility of these assets.

2. FDIC: The Federal Deposit Insurance Corporation (FDIC) is mentioned in the message as an example of a regulatory body in charge of banks’ deposits. Given the FDIC’s recent actions in Silicon Valley, the message suggests that there may be more restrictions in place for banks handling digital assets.

3. Risk and Volatility: The message highlights the potential risks and volatility of traditional banks, especially if digital assets are involved. Given the potential for banks to go bankrupt or swing significantly in just a few days, customers may be hesitant to trust them with digital assets.