Subnostr

I don’t know much about it to be honest, but here’s my thinking.

Some USDC reserves were at SVB. SVB went under, so now people are panic dumping USDC.

But SVB is an FDIC insured bank that’s just going to be acquired by a bigger bank. Once people realize this, panic stops and USDC returns to $1

nobody 2y ago

Ohhh. Next question is what's FDIC and why would a bank want to absorb a broke banks debt etc? They might structure a deal to take SOME of the debt with the customers and assets, but seems like a raw deal.

The legacy financial system has so many flaws. Wow.

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Discussion

monk_cactus 2y ago

SVB had a number of assets that performed poorly recently and led to their demise.

A bigger bank will acquire SVB to get those assets at a discount. They also get the clients and associated revenue from their loans (I think).

Here’s FDIC: https://en.m.wikipedia.org/wiki/Federal_Deposit_Insurance_Corporation

nobody 2y ago

This is unreal. I mean, I can believe it. But wow.

Government backed insurance on public banks.