Ripple CEO Brad Garlinghouse claims SVB shutdown will not affect daily operations

Ripple CEO Brad Garlinghouse recently addressed the collapse of Silicon Valley Bank (SVB) — formerly one of the top 20 largest banks in the US. With the bank’s recent collapse, investors across the board, including those from the crypto industry and traditional finance — became highly concerned, as many businesses had exposure to the now-collapsed bank. Garlinghouse wanted to address those concerns in a tweet published on March 12th and reassure investors that Ripple will remain stable.

Ripple CEO on the situation surrounding SVB

Garlinghouse confirmed that Ripple had “some exposure” to the bank, but he also noted that “we expect NO disruption to our day-to-day business, and already held a majority of our USD w/ a broader network of bank partners.”

Setting the record straight on SVB Qs:

Ripple had some exposure to SVB – it was a banking partner, and held some of our cash balance. Fortunately, we expect NO disruption to our day-to-day business, and already held a majority of our USD w/ a broader network of bank partners.

— Brad Garlinghouse (@bgarlinghouse) March 12, 2023

He added that a lot still remains unknown regarding the situation surrounding the bank and what happened to it. Ripple still doesn’t have all the information about the incident, but he added that, hopefully, more details will become available soon. Further, Garlinghouse did admit that Ripple had some money in SVB, although he did not specify the amount.

As for the Ripple community, many have reacted positively to the statement, expressing their belief and certainty about the company taken “proper risk management.”

I never doubted you or @Ripple to have taken proper risk management. 💯😎 Thank you for the statement.

— EarthAngel.XRP☀️ (@EarthAngel_Xrp) March 12, 2023

US Fed came up with a plan

Garlinghouse’s statement comes only one day after David Schwartz, Ripple’s CTO, promised that the company would address its exposure to the bank. While Garlinghouse delivered a statement on the very next day, it currently remains unclear whether this was what Schwartz had in mind.

However, only a few hours after the statement, the Federal Reserve revealed that it managed to establish a $25 billion funding program in order to help the banks that struggle with liquidity during these times of financial uncertainty. Then, in a separate announcement, the Fed also noted that depositors of SVB would be able to access all of the money they had in the bank’s custody as of today, Monday, March 13th.

It concluded by saying that no losses associated with the SVB’s resolution will be borne by the taxpayers.

Previously, on March 10th, Schwartz commented that he fails to understand how a run on a bank could lead to it becoming insolvent. According to him, if the bank was solvent before, that indicates that its assets exceed its obligations. As such, the bank would have become solvent again as their 10-year treasuries matured.

As for XRP itself, its price dipped slightly from the $0.40 high seen on March 9th, sinking to $0.35 on March 12th. However, it managed to recover slightly, and at the time of writing, it sits  at $0.36.

Related

• Brad Garlinghouse says Ripple will leave the US if it loses SEC case
• CEO of Ripple Warns of Damage to Crypto Industry if SEC Wins XRP Case
• Ripple CEO Expects Ruling Soon

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