Earlier this week, the bank, which held $209 billion in total assets at the end of last year, according to the Federal Deposit Insurance Corporation (FDIC), experienced a bank run.
Twitter boss Elon Musk is open to acquiring Silicon Valley Bank (SVB), which collapsed on Friday.
The billionaire revealed this in a tweet today in response to a suggestion for Twitter to acquire the failed bank to offer digital banking services.
“I’m open to the idea,” Musk wrote.
I’m open to the idea
— Elon Musk (@elonmusk) March 11, 2023
It is worth noting that the billionaire’s vision for the social media company has always been linked to payments. Speaking at Morgan Stanley’s Technology, Media & Telecom Conference earlier this month, Musk asserted that the microblogging platform had the potential to become the “biggest financial institution in the world.”
SVB, as highlighted in a tweet today by Ripple Chief Technology Officer David Schwartz less than a month ago, ranked as the 20th best Bank in the United States. In addition, as its name implies, it was one of the biggest lenders to the American tech sector domiciled in Silicon Valley.
Earlier this week, the bank, which held $209 billion in total assets at the end of last year, according to the Federal Deposit Insurance Corporation (FDIC), experienced a bank run. It came after it disclosed that it had sold previously held securities at a loss and was looking to sell over $2 billion in shares to strengthen its balance sheet. The situation deteriorated rapidly, forcing regulators to step in by Friday.
The FDIC has said that all insured depositors would have access to their assets by Monday while it would pay an advanced dividend to uninsured customers within the week, per a CNN report.
Several pundits have communicated that the bank is a victim of the Fed’s rate hike regime as yielding assets held by banks are now in the red. Smaller banks with ties to industries similarly affected by the rate hike are said to be most at risk.
Circle Confirms SVB Exposure
Meanwhile, Circle, issuers of the USD Coin (USDC) stablecoin, have confirmed their exposure to the collapsed bank.
In a two-part Twitter thread today, the firm noted that efforts to move $3.3 billion of USDC’s $40 billion reserve held at the bank had failed. Circle says it is waiting on regulators for directives like other SVB customers.
— TheCryptoBasic (@thecryptobasic) March 11, 2023
It remains unclear if the stablecoin issuer is an insured depositor at press time. The Crypto Basic has reached out for comments on this and is yet to receive a response.
Unsurprisingly, the news of Circle’s SVB exposure has put downward pressure on USDC’s price. At the time of writing, it is down 6% in the last 24 hours, trading for $0.94, significantly below its dollar peg.
Binance, which in recent months has experienced challenges finding banking partners in the U.S. via its Chief Executive Officer Changpeng Zhao, aka CZ, has confirmed that the firm has zero exposure to SVB.