State California Financial News

Worker filings for U.S. unemployment benefits jumped last week due to increases in New York and California but remained historically low, as demand for labor outstrips the number of people looking for work.

Last week, another major quake shook crypto markets. Silvergate Bank — a crypto-fiat gateway network for financial institutions and a significant on-ramp for cryptocurrencies in the United States — shut down operations due to liquidity problems. 

According to a lawyer representing the bankrupt crypto lender BlockFi Inc.,the company is in a stable financial position with access to ample cash reserves, despite having over $200 million in exposure to Silicon Valley Bank, Bloomberg reported.

A group of shareholders have reportedly filed a lawsuit against Silicon Valley Bank’s parent company and some of its executives amid the unfolding crisis.

Yet another crypto-friendly bank has gone down with the collapse of New York-based Signature Bank. But according to the industry, crypto now cannot be stopped.

Banks are the lifeblood of a nation’s economic system, and any bank collapse is disturbing. Last week saw two failures. On March 8, Silvergate Capital — the cryptocurrency-focused banking company — entered into voluntary liquidation. On March 10, United States regulators shut down and seized the deposits of tech-oriented Silicon Valley Bank in what was being called the second-largest bank failure in U.S. history. Both California institutions were victims of bank deposit runs. 

Silicon Valley Bank (SVB) has suffered a significant fall from grace following half a decade of being rated as one of the best banks in the United States.

Disclaimer: The Industry Talk section features insights by crypto industry players and is not a part of the editorial content of Cryptonews.com.

Startup founders and investors breathed a collective sigh of relief after the federal government agreed to backstop deposits at Silicon Valley Bank, but they said the lender’s collapse would drive changes in the industry’s financial practices.

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Circle is a Boston-based fintech company that provides payments and investment services using blockchain technology. USDC is a stablecoin issued by Circle and Coinbase, pegged to the value of the US dollar at a 1:1 ratio. It is one of the fastest-growing stablecoins, with a market capitalization of over $10 billion as of March 2022.

Major crypto exchange Coinbase stated that it has millions in corporate cash balance with the shuttered Signature Bank.

stablecoin got caught up in the collapse of a California bank late last week, it reprised the now-famous maxim of Nobuhiro Kiyotaki and John Moore. “Evil,” the economists had claimed in a 2001 lecture, later made available as a paper of the same title, “is the root of all money.” Turning a popular aphorism on its head was a ploy by the professors to enliven a technical discussion. “Evil is a strong word,” they wrote. “You may find the moral category too severe for something as mild as breaking a promise. In which case, you may want to change the title to ‘Distrust Is the Root of All Money.’ But that wouldn’t have quite the same ring.” Events last week showed that Kiyotaki-Moore may have been right, not just in their analysis but also in their hyperbole: People accept and hold money not because it circulates freely and is widely used to store value, but because it helps the society overcome the scourge of broken promises. For something to aspire to money-ness, it must be free of even the slightest doubt in that regard. That was clearly not the case with Circle Internet Financial Ltd.’s USD Coin, or USDC, the No. 2 dollar clone behind Tether. News that around 8% of the crypto firm’s reserves were on deposit at Silicon Valley Bank, which was closed down by regulators Friday, sent the price of the stablecoin sharply below $1, falling to less than 85 cents before recovering. In the language of money-market funds — the older, more conventional cousins of blockchain-based stablecoins — USDC broke the buck. Circle may still keep its promise of redeeming all its coins 1:1 for dollar. But a small doubt that it may not be able to do so arose. Even if briefly, USDC has lost its claim of being money.

The wider cryptocurrency community continues to debate the ongoing fallout following the closure of three major American banks, with calls for neobank services for the industry on the cards.

Circle’s stablecoin USD Coin (USDC) was regaining its $1 peg, at press time. This followed after CEO Jeremy Allaire confirmed that its reserves were secure and that the company had new banking partners lined up for banking beginning Monday morning.

Worker filings for U.S. unemployment benefits jumped last week due to increases in New York and California but remained historically low, as demand for labor outstrips the number of people looking for work.

The February employment report does little to sharply alter the economic outlook for Federal Reserve officials who are considering how much to raise interest rates at their coming meeting.

Circle’s stablecoin USD Coin (USDC) is climbing back to its $1 peg following confirmation from CEO Jeremy Allaire that its reserves are safe and the firm has new banking partners lined up at “banking open tomorrow morning.”

The sudden collapse of Silicon Valley Bank (SBV) has quickly unfolded over the course of three days, depegging stablecoins, leading regulators in the United States and United Kingdom to prepare emergency plans and raising fears among small businesses, venture capitalists and other depositors with funds stuck at the California tech bank.

The United States Federal Deposit Insurance Corporation (FIDC) started an auction process on March 11 night for Silicon Valley Bank, Bloomberg reported citing unnamed sources. Bids are allegedly open for just a few hours, before the process closes later this Sunday. 

More than three hundred venture capital firms have signed a joint statement vowing to do business again with Silicon Valley Bank if it is «purchased and appropriately capitalized,» after the financial institution failed on Friday.