Collapsed Banks Had Crypto In Common !!, 4034

Good morning, I’m Still reporting on the coup.

Last week’s collapse of three banks had one significant financial feature in common – they were all involved providing a desperately-needed link between the cryptocurrency markets and the traditional banking system, sometimes known as the USD – the U.S. Dollar.

The demise of Signature Bank, Silicon Valley Bank, and Silvergate Bank has fueled speculation that the Federal Reserve was clearing the deck of the existing crypto-friendly banks to make way for the introduction of their CBDC, the government's own digital currency.

Signature Bank, headquartered in New York, had a market capitalization of $11.2 billion as of September 2021. Silicon Valley Bank, based in Santa Clara, California, had a market cap of $12.6 billion and had been serving startup companies, venture capitalists, and entrepreneurs. Silvergate Bank, also based in California, had a market cap of just $2.4 billion and had been focused on providing banking services to the crypto industry.

Silicon Valley Bank, or SVB, had fallen prey to the woke agenda and had apparently lost sight of their risk profile in the wake of the extreme borrowing and spending of the Biden Administration, followed by extreme rate raising by the Federal Reserve. SVB didn’t even have a risk manager for its final few months. So, they were easy targets to tip over to insolvency and dissolution.

So, to put it in perspective, these banks were nowhere near the size of JP Morgan, Bank of America, or Citigroup. They were relatively small players in the banking industry that had carved out niches for themselves providing an interface between crypto markets and the U.S. dollar. But that doesn't mean their collapse is insignificant.

However, some members of Congress seem to have made the crypto connection between the three failures.

Tom Emmer, the majority whip of the United States House of Representatives, has expressed concerns that federal officials are "weaponizing" recent concerns about the liquidity of the banking industry in general in order to weaken confidence in cryptocurrency.

In a March 15 letter, Emmer called on Federal Deposit Insurance Corporation chair Martin Gruenberg to answer questions as to whether the government corporation has specifically instructed banks not to provide services to crypto firms, or suggested doing so may be an “onerous” task.

The Minnesota representative cited claims from Signature Bank board member and former U.S. Representative Barney Frank, who reportedly called the FDIC moving against Signature a “strong anti-crypto message” rather than being based on concerns about the bank’s solvency. According to Emmer:

“These actions to weaponize recent instability in the banking sector, catalyzed by catastrophic government spending and unprecedented interest rate hikes, are deeply inappropriate and could lead to broader financial instability.”

Emmer also targeted the administration of Joe Biden, accusing policymakers of attempting to “choke off digital assets” from the U.S. financial system. The Minnesota representative made similar claims prior to the collapse of Silicon Valley Bank and Signature Bank. He worries that the U.S. government could “easily weaponize” a central bank digital currency as a surveillance tool which could monitor all personal financial transactions made in the United States.

In other words, it would be to end of any sort of financial privacy.

I’m still reporting from just outside the citadel of world freedom. Good day.