New York-based Signature Bank, another crypto-friendly bank, has been shut down by state regulators.
The Fed explained in a March 12 statement that the decision was made jointly with the Federal Deposit Insurance Corporation (FDIC) to protect the national economy and increase public confidence in the banking system.
The Fed noted that it is supporting all Signature Bank depositors.
“All depositors at the institution will be paid in full. As with SVB’s settlement, senders will not suffer any losses.”
“This step will ensure that the U.S. banking system continues to play an important role in protecting deposits and providing credit to households and businesses in a manner that promotes strong and sustainable economic growth.”
Earlier Sunday, the largest U.S. government financial regulators, including the Federal Reserve, the Treasury and the FDIC, issued a joint statement pledging to save the last of the SVB’s money for all depositors — even those not fully covered by the federal depositors. People covered by insurance standards.
Therefore, all depositors will be able to receive their funds by Monday, March 13. Taxpayers will have to foot the bill as part of the solution. Instead, shareholders and “certain unsecured creditors” will not be protected. Senior executives have also been removed.
In addition, the Fed announced that it is creating a new Bank Term Financing Program (BTFP), which will provide loans with maturities of up to one year to qualified depository institutions (including banks, savings associations, credit unions, etc.). The purpose of the program is to help ensure that banks can meet the needs of all savers and support American businesses and households during this uncertain time.
In response to the news, both Bitcoin and USDC quickly returned to pre-bank prices.
USDC is currently trading at $0.995, almost back to its expected flat price of $1, having lost the peg on Friday — when Circle revealed possible exposure to SVB.
Meanwhile, Bitcoin has breached the $22,000 mark and is currently trading around $22,500, up more than 10% on the day.
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As reported by Cointelegraph