The irony is that many of these neo-banks, such as Silvergate, operate with far higher reserve ratios than traditional banks.

However, since they cannot create fiat credit out of thin air like their tradfi counterparts, they are much more vulnerable to collapse in the short term, and they don’t get bailed out as readily.

Remember that, since 2020, the US banking reserve requirements fell to, I kid you not, 0%.

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