Coinbase stopped redemptions because SVB is not operational this weekend while the FDIC takes over.
FDIC will cover the 250k, and another bank will acquire SVB and resume operations
Discussion
TBD.
The bank doesn't have a full reserve of assets. So there's a gap somewhere. The 'hold to maturity' value isn't real. They won't get that much, and so there's not enough value on the books to pay all depositors.
Nobody is just going to walk in and say sure, you get 100% of your money.
Uninsured Depositors are gonna get a haircut. How does USDC parent company cover that hole? Do they get a loan from someone? Maybe, maybe there's a run first thing Monday and they have no time for that.
I mean 1) how sure are you that all of USDC’s reserves are at SVB?
2) Banks make money off depositors. Buying all of SVB’s assets at a discount should be pretty appealing for a big bank. And a big bank can easily make everyone whole
Not all, 10% of reserves. Once the run starts, no one wants to be the last 10% of people, cause that money doesn't exist.
I'm no expert, but it seems like the math is pretty simple, but banking is complicated and you may be right.
The way I see it, the bank is in FDIC custody because it's real reserves at market prices minus its liabilities (depositors money) is negative. There's no rescue from that. The bankruptcy court will sell its assets and distribute those to secured creditors and such and the uninsured depositors will get a haircut.