Spring has sprung and so has the crypto and fintech world. As March comes to a close, the industry leaves behind a month defined by shock, contagion fears, and a fast pivot into “what’s next” — across banking stability, digital assets, CBDCs, and AI-powered finance.

A series of bank failures became the month’s biggest and most headline-making event. The sequence began with Silvergate, then escalated with the collapse of Silicon Valley Bank and Signature Bank, before spreading to Europe and ending with Credit Suisse being acquired by UBS for $3.2 billion in a government-backed deal aimed at protecting the local economy from wider damage.

At the same time, the banking turmoil acted as a bullish catalyst for crypto. Between March 1 and 29, the combined digital asset market capitalization increased by 12.5% to $1.19 trillion, with most top coins posting gains. This rebound played out even as governments and major financial players continued to advance CBDC development: Swift moved into the second phase of its CBDC pilot with 18 commercial and central banks, and the Reserve Bank of Australia announced a collaboration with major financial institutions to test its CBDC solution in the coming months.

Of course, it would be impossible to ignore AI breakthroughs. More financial players are moving from curiosity to implementation — Stripe, Morgan Stanley, Goldman Sachs, and Microsoft are among the names testing or integrating generative AI to strengthen products, workflows, and client-facing tools. Still, not everyone shares the same enthusiasm, and some banks have restricted employee use of ChatGPT.

Below is our March digest — the events, the data points, and the signals shaping what comes next.

Flashbacks From 2008

It’s safe to say that a series of bank failures was the month’s biggest and most shocking event. On March 9, US crypto-friendly financial institution Silvergate collapsed, citing recent industry and regulatory developments. Silicon Valley Bank, a prominent bank and startup lender in the United States, followed Silvergate one day later. 

On March 13, the digital asset-focused Signature Bank was seized by regulators in a move that aimed to protect depositors and the financial system. About a week later, the wave of banking collapses spread to Europe, pushing Switzerland’s largest bank (UBS) to acquire struggling rival Credit Suisse for $3.2 billion in a deal struck with the government to avoid the local economy from collapsing. Following local bank collapses, US regulators also acted quickly to protect the deposits of Signature’s and SVB’s clients.

The Sky Is The Limit

While some blamed the crypto industry, the changing economic environment, significant fed rate hikes, and ineffective interest rate management were the most likely reasons behind recent banking collapses. Yet the Federal Reserve decided to raise interest rates by 25 basis points on March 22 in its ninth hike since March 2022. A day later, the Bank of England followed the Fed’s footsteps and enacted a quarter percentage point increase to 4.25% to combat higher-than-expected inflation in the United Kingdom. In the meantime, a Bank of America analyst predicts that the last interest rate hikes could lead to an emergence of a new bubble on the stock market.

Crypto’s New Bullish Catalyst

The collapse of Silvergate, SVB, Signature, and Credit Suisse has turned many investors to cryptocurrencies. Serving as a bullish catalyst, the combined digital asset market capitalization has been up by 12.5% at $1.19 trillion between March 1 and 29. During this period, the majority of top coins recorded significant gains. While Bitcoin closed the month with a 17.8% surge, Ether grew its value by 6.88% to $1,713. In the meantime, XRP gained 10.97% to a five-month high as Ripple’s court case with the US Securities and Exchange Commission (SEC) is expected to end soon.

A Visit To Shanghai

Ethereum’s much-anticipated Shanghai (also called Shapella) hard fork has recently got an official target date. Set to commence on April 12 at epoch 194,048, the upgrade will come with an important change community members have been waiting for since last year’s Merge. While Ethereum has successfully shifted from the mining-based proof-of-work (PoW) consensus mechanism to the energy-efficient proof-of-stake (PoS) algorithm, validators haven’t been able to withdraw their 32 ETH stakes since the switch took place after Shapella’s launch, which will enable staking withdrawals to be reinstated, with a maximum of 16,000 ETH to move to be processed per slot or every 12 seconds.

AI-Powered Finance

With recent breakthroughs in artificial intelligence, more financial players are starting to realize the technology to enhance their ecosystems. Fintech startup Stripe is among them, with the firm deciding to integrate the Microsoft-backed OpenAI’s recently launched GPT-4 AI model into its digital payment processing services and other products. While many banking giants — including JP Morgan, Citigroup, and Deutsche Bank — have barred their employees from using ChatGPT, Morgan Stanley is testing the chatbot to help financial advisors. Meanwhile, Goldman Sachs is piloting its in-house generative AI tools to assist developers’ code-writing process.

Double Capital Gains And Excise Mining Tax

The Biden administration’s upcoming budget proposal has been in the spotlight this month. And for a valid reason. According to a report, the US government seeks to increase the capital gains tax rate from 20% to nearly 40% for investors with at least $1 million of profits on long-term investments. Aimed at reducing the deficit by around $3 trillion over the next 10 years, the budget proposal also includes crackdowns against crypto wash sales and tax-loss harvesting by amending existing rules. Moreover, the US Treasury Department has also proposed a 30% excise tax on crypto mining electricity costs. This move seeks to cut back the activity of miners to reduce the nation’s power consumption.

CBDCs To Take Over The World By 2030

As banks struggle amid the current economic conditions, crypto is gradually recovering from the last bear market. In the meantime, governments and large financial players worldwide are continuously progressing with the development of central bank digital currencies (CBDCs).

This month, while Swift moved into its CBDC pilot’s second phase with 18 commercial and central banks, the Reserve Bank of Australia announced its collaboration with major financial institutions to test its CBDC solution in the coming months. Furthermore, Juniper Research’s new study projected central bank digital currency payments to reach $213 billion by 2030, with a radical growth of over 260,000% from 2023’s $100 million. And in a controversial move, Florida Governor Ron DeSantis proposed new legislation to prohibit the use of CBDCs as money within his state, citing concerns over “government-sanctioned surveillance” and barriers to innovation.

Another Regulator Is After Binance

This year, Binance has been in the crosshairs of regulators worldwide. Last month, the exchange giant’s BUSD stablecoin briefly lost its peg due to a legal trouble between the SEC and Paxos, the digital asset’s issuer. Now another US regulator, the Commodities Futures Trading Commission (CFTC), sued Binance and its founder, Changpeng Zhao (CZ), for allegedly offering unregistered cryptocurrency derivatives products in the United States. According to the financial watchdog, the move goes against federal law, which was reportedly breached under the company’s CEO’s leadership. The regulator also alleges that Changpeng Zhao directed Binance employees to spoof their locations through virtual private networks (VPNs) in a “willful evasion of US law.”

Conclusion

March made one point hard to ignore: crypto and fintech now move inside the same macro frame as banks, rates, and regulatory response. Bank stress re-priced risk quickly, and crypto captured a slice of that rotation, while policymakers pushed in two directions at once — faster CBDC experimentation on one side, tougher enforcement and market-structure cases on the other. Add AI to the mix, and the sector is entering a phase where infrastructure decisions (custody, compliance, automation, settlement rails) matter as much as price.

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