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Full text of Treasury, Federal Reserve and FDIC Statement: Acting Decisively to Protect the U.S. Economy

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The macro direction is unclear, and the February CPI will be released on Tuesday, which will completely determine the extent of the rate hike.

原文标题：《一夜变天：美联储出手救市 USDC 危机解除加密友好银行 Signature 被关闭》

Colin Wu says blockchain

As the Fed stepped in, there was a sea change in the market.

The Treasury, the Federal Reserve and the FDIC issued a joint statement

Full text:

Today, we are taking decisive action to protect the American economy by strengthening public confidence in our banking system. This step will ensure that the U.S. banking system continues to play its vital role in protecting deposits and providing access to credit for households and businesses in a way that promotes strong and sustainable economic growth.

After receiving recommendations from the boards of the FDIC and the Federal Reserve and in consultation with the President, Yellen approved actions that will enable the FDIC to complete its resolution on Silicon Valley Bank of Santa Clara, Calif., in a manner that adequately protects all depositors. From Monday 13 March, savers will have access to all their money. Losses related to Silicon Valley Bank's resolution will not be borne by taxpayers.

We are also announcing a similar systemic risk exception for Signature Bank in New York, which was closed today by its state-chartered agency. All of the institution's depositors will be recovered in their entirety. As with the Silicon Valley Bank resolution, taxpayers will not be on the hook for any losses.

Shareholders and certain unsecured debtors will not be protected. Senior managers have also been removed. Any losses suffered by the deposit insurance fund to support uninsured depositors would be recovered by a special assessment of the bank, as required by law.

Finally, the Federal Reserve announced Sunday that it will provide additional funds to eligible depository institutions to help ensure that banks are able to meet the needs of all depositors.

The U.S. banking system remains resilient and on solid footing, thanks in large part to reforms made after the financial crisis to make sure the industry is better protected. These reforms, combined with today's actions, demonstrate our commitment to do what is necessary to ensure savers' savings are safe.

Read the original article:

https://www.federalreserve.gov/newsevents/pressreleases/monetary20230312b.htm

USDC has since recovered to anchor at 0.99 and the crisis in USDC appears to have been resolved.

Circle states:

We are pleased that the U.S. government and financial regulators have taken key steps to mitigate risks posed by parts of the banking system. 100% deposits from SVBS are safe and will open tomorrow. 100% USDC reserves are also safe and sound, and we will complete the transfer of the remaining SVB cash to BNY Mellon. As previously stated, USDC liquidity operations will resume tomorrow morning when banks open. With tonight's announcement of the closure of Signature Bank, we will no longer be able to process mints and redemptions through SigNet and we will rely on the Bank of New York Mellon for settlement. We will introduce a new transaction banking partner as soon as tomorrow with automatic foundry and redemption capabilities. We are committed to building robust and automated USDC clearing and reserve operations with the highest quality and transparency. We have long advocated full-reserve digital currency banking to insulate the fundamental layer of our Internet currency and payment system from the risks of fractional reserve banking. In fact, the Payment for Stablecoin Act, which remains very actively pursued by Congress, would provide in law a regime under which Stablecoin funds would be held in cash at the Federal Reserve and in Treasury bills. If we want a truly safe financial system, we need this law now more than ever.

Coinbase issued a statement saying that despite the recent turmoil we've seen in the traditional banking sector, Coinbase continues to operate as usual. At Coinbase, all customer funds continue to be secure and accessible, including the USDC conversion, which will resume on Monday. All customer cash at the bank continues to be protected by FDIC pass-through insurance. As a result of the FDIC's suspension of Signature's transactions, we are currently facilitating cash transactions for all customers with other banking partners.

CZ is critical: Once you do a rescue, you're stuck between a rock and a hard place. "Consumer protection" by diluting all citizens. If you do a bailout, then banks have zero incentive to manage risk. When you fail, you get bailed out. Bail-outs encourage taking bigger and bigger risks, which require more bail-outs.

There is widespread concern among American industry about the SIGNATURE closures.

For The Block Editor in chief Frank Chaparro says that with SIGNATURE BANK Crypto-Friendly Bank being shut down, the capital markets of Crypto are essentially back to where they were before 2014. Any new company has no access to banking relationships. In many ways, cryptocurrencies have officially become unbanked. This will make the banking situation for cryptocurrency companies extremely difficult and absolutely brutal. According to Bloomberg, a person familiar with the company's operations said the decision to place Signature in receivership came as a surprise to its officials, who found out about the announcement shortly before it was made. The bank faced heavy deposit outflows on Friday, but the situation had stabilized by Sunday, said the person, who asked not to be named discussing private matters.

In addition, the subsequent macro trend also let the outside world confused.

After this bailout, the CME FedWatch Tool shows that the Fed's 50bps rate hike forecast nine days from now has fallen to 17.4 percent from 40 percent a day earlier. 82.6% probability of rate hike 25bps. The February CPI will be released on Tuesday, which will determine the extent of the rate hike.