This is the third USDC partner bank to close this week, they only have 4 others left. High interest rates have weakened regular bank liquidity and the swings of stablecoin runs are toppling them like dominoes.<p>It is clear as day now that Crypto/stablecoins cannot bank in regular US banks and needs its own bank. Crypto is essentially a DDOS attack on a regular bank due to bank liquidity rules in the US. Normal banks are designed to hold a large spread of small accounts and thus keep a limited % of liquidity to cover withdrawal needs which are relatively low % for that type of customer. The rest of the cash is invested and produces a return.<p>Crypto has huge liquidity demands on small timeframes, especially when there are runs on exchanges. If normal banks are designed to move slowly and carefully to remain good stuarts of their depositors, crypto essentially trips that infrastructure with big swings.
Another consequence of political lobbying against Dodd-Frank, ironically by Frank himself (who was on the board of Signature bank)?<p><a href="https://slate.com/news-and-politics/2018/05/barney-frank-was-getting-paid-by-signature-bank-when-he-said-it-was-ok-to-deregulate-banks.html" rel="nofollow">https://slate.com/news-and-politics/2018/05/barney-frank-was...</a>
As someone who's not an expert in finance, it's impossible for me to tell how seriously to take various predictions in these threads, because almost none of them disclose their exposure, and so there's no way to distinguish between wishful thinking and sound analysis.<p>So for all these non-disclosing multi-paragraph posts, they might as well just say "it'll be fine, trust me bro" from my point of view.
The JPM report that claims SIVB's position was unique also includes Signature bank in their figure on page 2. By their loss adjusted capital ratio chart signature was better off than all but 5 of the 20 listed banks.