So Silicon Valley Bank collapsed last week, and even though it’s insured, people are still going to lose their money. They’re insured for 250K USD, which means that not everyone will be safe from this collapse. In fact, a payroll service company called Rippling had to tell its customers that some paychecks weren’t coming on time because of the SVB collapse. Can someone remind me again why they kept calling centralized banks safer?
Centralized AND decentralized services are prone to collapse. But guess what? They usually get some help. And yes, decentralized services also sometimes get help when they need it. For example, not too long ago Evеrscale got 5 mln from the VVF, and more bailouts are happening, including from the crypto giant Binance. Finance needs to improve in general. DeFi offers numerous advantages but the system as a whole still can gain from a better infrastructure that keeps everyone’s money safer.
This isn’t up to date. The government said that due to the systemic risk of SVB failure, that they would cover all deposits. It’s not a quite a bailout, because the shareholders of the bank lost all their money.
> So Silicon Valley Bank collapsed last week, and even though it’s insured, people are still going to lose their money. They’re insured for 250K USD, which means that not everyone will be safe from this collapse
Just a heads up, for SVB that isn’t the case, since the system is rigged and rich people can’t lose money. Not disagreeing with the points, just that technicality
*The Treasury Department designated both SVB and Signature as systemic risks, giving it authority to unwind both institutions in a way that it said “fully protects all depositors.” The FDIC’s deposit insurance fund will be used to cover depositors, many of whom were uninsured due to the $250,000 cap on guaranteed deposits.*
https://www.cnbc.com/2023/03/12/regulators-unveil-plan-to-stem-damage-from-svb-collapse.html
All customer funds are being covered in SVB. What matters more is that the biggest off-ramp/on-ramp to crypto silvergate also went down. What also matters is that FDIC insurance wont be able to cover anything once all the other banks fail.
I only have one statement to make. Banks are not your friend, cex are not your friend.
The mods have to really look at this. 15 up votes and no comments?? Anyway, your overview is wrong. All depositors will be made whole. Investors will not. Banking as it stands today is a representation of monetary policy and the health of the dollar. It’s pretty clear it doesn’t offer any inherent value because we are coming to find that all fractional reserve models are fragile.
Personally, I think we should be talking about a Signature. Everything about Signatures seizure is incredibly sketchy and needs to be reviewed publicly.
Most of this is wrong other than the sentiment that centralized banking isn’t as bulletproof as it’s made out to be. And even that’s kind of wrong. Centralized banking is great….If you can trust bankers.
The weirdest thing about SVB is that they are now considered systemically important. Before they crashed, they weren’t. They didn’t have to stress test or follow the Liquidity Coverage Ratio that the huge banks do. There needs to be some consistency here.
FDIC (being a government organization) will print unlimited money and cover everything. What I get from it is USD is a s**tcoin with an infinite supply♾️