Businesses should have two payrolls “value of cash” in crypto: Tim Draper
American venture capital investor and entrepreneur Tim Draper advised entrepreneurs to keep at least two payrolls worth of cash in Bitcoin (BTC) or alternative cryptocurrencies, in response to the uncertainty created by the collapse of Silicon Valley Bank (SVB).
In a March 25 report aimed at business founders, Tim Draper stated that Bitcoin is a hedge against a “domino run” on banks and against overbearing government intervention, adding that businesses “can no longer rely” on a single bank or governing body to manage their cash.
Draper suggested that business founders keep at least “6 months of short-term cash” in two separate bank accounts — one with a local bank and another with an international bank.
He added that businesses should also have the equivalent of at least two payrolls in Bitcoin and other cryptocurrencies.
Draper explained that these preventive measures were necessary, since for the “first time in many years” governments are taking control of banks and governments themselves “are in danger of becoming insolvent”.
He warned that since boards and management are “responsible” for meeting payroll deadlines regardless, it is important to have a diversified approach to cash management. He noted:
“It is important to develop contingency plans for bank failures that may happen more and more often if the government continues to print money and whip up interest rates to counter inflation caused by overprinting money.”
Draper stated that the reason behind the implementation of this plan was due to “many startups” seeking “emergency help” from him after SVB and other banks closed down.
He also warned founders in the report to be wary of fraud, noting that fraudsters are adept at identifying weaknesses in a system and exploiting them.
Furthermore, he advised the founders that phishing theft can be prevented by verifying with all parties involved when there are changes in wiring instructions or a new approval system.
Related: Silicon Valley Bank’s downfall has many causes, but crypto is not one
This comes after Tim Draper performed a self-composed Bitcoin Song at the end of his keynote address at Paris Blockchain Week 2023 on March 22.
He stated that the song was dedicated to Silicon Valley Bank and “all the banks that have failed and will fail.”
The song received a round of applause from the audience, and Draper ended his time on stage by saying that blockchain, Bitcoin and smart contracts make up one of the “biggest transitions in the history of the world.”
