3xS — Silvergate, Silicon Valley, Signature Banks…

Babel Fish
3 min readMar 14, 2023

Brought to you by Hyde

Well, it looks like we’ve got some more banking drama on our hands. Silvergate Bank, Silicon Valley Bank, and Signature Bank all hit the headlines recently with reports of trouble brewing. You know, just your typical run-of-the-mill bank failures caused by bad investments, insolvency, and regulatory intervention.

But let’s dive a little deeper into what really happened. Silvergate Bank, a relatively small bank in California, suffered losses from risky crypto loans. Meanwhile, Silicon Valley Bank faced problems due to the recent exodus of their depositors. Signature Bank’s sudden shutdown is a true head-scratcher. According to former Congressman Barney Frank, who helped draft the Dodd-Frank Act after the 2008 financial crisis, there was “no real objective reason” to seize the bank. It seems regulators just wanted to make a bold statement about their stance on crypto, and what better way to do that than by targeting a bank that had no insolvency based on its fundamentals, but still “could threaten the stability of the entire financial system”?

Now, it’s no secret that US banks have been propped up by interest-free money from the US government and Federal Reserve for years to manipulate the stock market and buy government bonds. But when inflation started to rise and the demand for US treasuries dried up, the government had to cut off the flow of free printed money, leaving these banks struggling without their regular fix.

And let’s not forget about the fractional reserve system, which leaves smaller banks at risk of collapsing when too many people try to withdraw their funds at once.

But fear not, because the solution to all these banking woes is here: Central Bank Digital Currencies (CBDCs). Because we all know that the best way to solve a problem caused by government intervention is with even more government intervention.

Of course, CBDCs come with their own set of risks, including threats to privacy, increased government control over the financial system, and potential for abuse by central banks. As Satoshi Nakamoto wrote in the Bitcoin whitepaper, “The root problem with conventional currency is all the trust that’s required to make it work.”

But hey, what could go wrong? The US financial system is in great shape, the markets are completely unmanipulated, and the future looks bright. Right?

It’s becoming more and more apparent that the traditional financial system is a sinking ship. With each passing day, the outdated, centralized financial system and more banks fail and more people lose their hard-earned savings due to the incompetence of those in charge. It’s time for a new approach, one that doesn’t rely on trust in flawed institutions and centralized control.

The idea that Bitcoin will eventually become the dominant global currency — may sound like a far-fetched dream, but there’s actually a serious movement of people and projects working towards this goal. There are many serious crypto projects working towards the common goal of hyperbicoinization and decentralized financial systems — where trust in banks is no longer necessary, and the power to control our own finances is in our hands.

Sure, Bitcoin has its flaws and challenges to overcome, but when compared to the broken traditional banking system, it’s a breath of fresh air. With its decentralized nature and transparent ledger, it offers a level of security and trust that traditional banks simply can’t match. Of course, there will be hurdles to overcome, and it won’t happen overnight. But when faced with a financial system that’s collapsing before our very eyes, what other option do we have?

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Babel Fish

BabelFish.money - stablecoin aggregator and liquidity provider. Issuer of XUSD - meta-stablecoin on RSK chain.