Great to see you here David! It’s a little quiet here, for sure. The FED’s wording here is a little vague as to what it will actually do (par for the course) but I wonder if proper stablecoin audits are finally on the menu.
ELI5, can you crash a bank with crypto? (I’m not planning to do it just curious)
So basically, Signature and Silvergate did. Their problem was not crypto directly, but crypto customers - they had billions in deposits which didn’t stay in the bank, the customers kept withdrawing huge amounts at short notice like it was their own money or something. Neither bank could quite cover the deposits at such short notice, and eventually they just died. Both were kept working in that time. Silicon Valley Bank went down soon after in the same way, except the hot money depositors were VCs and startups.
That’s a very nice explanation, thanks! Also nice to interact with people on Lemmy! I was curious, “withdrawing huge amounts at short notice like it was their own money or something”, if that’s what you can do with it, isn’t that exactly what it is, your money?
well, precisely. Banks expected depositors would keep their money in the bank. This turned out to be incorrect when interest rates went up.
I see, I misread it then. Slightly off-topic, but I just realized you are the one who wrote the Attack of the 50 foot blockchain and now I feel I’m in the precense of a legend. I’m going to buy your book, because I’m genuinly interested in an in-depth perspective by someone who is anti-crypto. I’m not anti-crypto, but I like to keep an open mind!
