• The U.S. government released a joint statement on Sunday, promising to save all depositors at Silicon Valley Bank (SVB).
• In response, the prices of both Bitcoin and USDC are returning to pre-collapse levels.
• Taxpayers will shoulder expenses as part of the resolution, while shareholders and senior management will not be protected.
Government Bails Out Silicon Valley Bank Depositors
The Federal Reserve, Treasury Department, and Federal Deposit Insurance Corporation have jointly announced that every depositor at Silicon Valley Bank (SVB) will be able to access their money by Monday, March 13th. This decision was made in order to protect deposits and provide households and businesses with access to credit in a manner that promotes strong economic growth.
Rising Prices for BTC & USDC
In response to the news of government support for SVB depositors, both Bitcoin and USDC are quickly regaining their price levels from before the bank’s collapse.
Taxpayers will bear expenses as part of this resolution; however, shareholders and “certain unsecured debtholders” won’t be protected. Additionally, senior management has been removed from their roles.
Business Leaders Speak Out
Several business leaders called on the government over the weekend to stop contagion from SVB’s failure – including Bill Ackman and Mark Cuban – with stablecoin issuer Circle specifically requesting similar action due to having $3.3 billion of its USDC reserves within the firm.
The U.S.’s biggest financial regulators have provided assurance that all Silicon Valley Bank depositors will receive their funds back safely after Monday 13th March 2021 in an effort to ensure stability of the banking system and promote strong economic growth going forward.