SVB collapse shows fickleness of crypto money

Sharp fall: A customer (left) reading a notice about the SVB closure last Friday. News that around 8% of the crypto firm’s reserves were on deposit at the bank sent the price of the stablecoin sharply below US$1 (RM4.53), falling to less than 85 US cents (RM3.84) before recovering. — AFP

WHEN the world’s second-largest stablecoin got caught up in the collapse of a California bank late last week, it reprised the now-famous maxim of Nobuhiro Kiyotaki and John Moore.

“Evil,” the economists had claimed in a 2001 lecture, later made available as a paper of the same title, “is the root of all money.”