The company’s exposure to Silicon Valley Bank (SVB) was discussed by Ripple CEO Brad Garlinghouse on Twitter on March 12. He also assured his followers that Ripple was stable.
According to Garlinghouse, Ripple had exposure to SVB. However, he stated there would be no disruption to their day-to-day business, as they already held most of their USD with a broader network of bank partners.
The short tweet thread was intended to reassure users that Ripple remained in a strong financial position.
David Schwartz, the chief technology officer of Ripple, had committed on March 11 that the business would issue a comment on its Ripple exposure “shortly”; however, it is unclear whether he had in mind the Garlinghouse tweet.
Following the news of Silicon Valley Bank’s insolvency, the Federal Reserve announced a funding program worth $25 billion to support banks facing financial stress.
Additionally, in a separate communication, the Federal Reserve confirmed that starting from March 13, all depositors of Silicon Valley Bank would be able to access their funds in full. The announcement also assured taxpayers would not bear any losses associated with the bank’s resolution.
Schwartz shared his confusion about the connection between a bank run and its insolvency. He reasoned that if the bank had been solvent before, then its assets should have exceeded its obligations, and it probably would have become solvent as its 10-year treasuries matured. However, they did not get that opportunity due to a run.
Ripple is embroiled in a legal dispute with the United States Securities and Exchange Commission regarding the status of their XRP cryptocurrency. Still, a Ripple official predicted that 2022 would be a “record year of business and customer growth” for the company. In January, Garlinghouse projected that the matter would be concluded in June.
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