Ava Labs president John Wu is warning that the crypto industry will be adversely affected by the elimination of onramps into the crypto ecosystem.
Asked by Bloomberg’s Caroline Hyde to comment on Silvergate Bank’s plan to shut down, the president of the Avalanche (AVAX) development firm says it will get much more difficult for the crypto industry when all the intermediaries into the digital asset ecosystem disappear.
“Clearly it’s going to be a lot harder when all the intermediaries and seemingly all the intermediaries and the onramps for institutions and individuals into the crypto ecosystem are one by one getting removed. Either through regulation, bad actors or risk management, or bad fundamentals like the Silvergate case. So it’s not easy. It makes it harder.”
According to Wu, crypto firms moving outside the United States could be one of the consequences of banks and other intermediaries ceasing to service the digital asset industry.
“The issue is if there are no onramps, no intermediaries to help new institutions come into this space, that will delay the growth of the space.
The other problem is even healthy balance sheets in the space, they need little things… banking services.
Crypto is a fintech business and legitimate businesses need banking services that pay people, to do things that every other company does.
If we remove the banks that help these companies do that, you’re removing companies’ desire to be onshore. And unfortunately, US companies will move offshore for banking services and other things that they need to just operate.”
The Ava Labs president says the best way forward is for the crypto industry to engage with regulators and lawmakers.
“I think we need to open up a healthy dialogue. It can’t be just one way. And if that happens, you’ll bring a lot of capital markets back and a lot of innovation back.
Otherwise, like I’ve been saying, things are going to continue to move offshore because of certainty and rules and regulations is happening in Europe, is happening actually even in Asia.”
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