First Citizens Acquires Silicon Valley Bank – Good News For Crypto?
First Citizens BancShares, the parent company of First Citizens Bank, has made a significant move in the banking world by agreeing to acquire Silicon Valley Bank (SVB).
The Federal Deposit Insurance Corporation (FDIC) confirmed the deal in a statement Monday, which reported by Bloomberg.
With a number of key crypto companies relying on SVB before their downfall, what impact will the acquisition of First Citizens BancShares have on the future of the crypto industry?
First Citizens Acquisition of SVB: Details
After SVB experienced a run on deposits, which led to insolvency, the FDIC took control of the bank weeks ago. As part of the deal, First Citizens BancShares has agreed to buy approximately $72 billion in assets from Silicon Valley Bank at a discounted price of $16.5 billion.
The FDIC will retain control of about $90 billion in securities and other assets of the California-based bank.
Image: Reuters
The FDIC will also receive rights to appreciation in First Citizens BancShares, which could potentially be worth up to $500 million. The 17 former branches of Silicon Valley Bank will now operate as First Citizens Bank.
The failure of Silicon Valley Bank is expected to result in a loss of about $20 billion to the Deposit Insurance Fund, according to the regulator.
What this move means for crypto
With the acquisition of SVB by First Citizens BancShares, there are concerns about how this move will affect the crypto market.
SVB has played a crucial role in providing banking services to some of the largest crypto companies in the world, including Circle Financial.
Image - CryptoNews.com
Following Circle’s announcement that $3.3 billion of its deposits were held at SVB, the value of the USDC stablecoin briefly fell below the $1 peg.
The acquisition raises questions about whether the bank’s crypto services will continue, and if so, how they might change under new ownership.
While First Citizens BancShares has not publicly commented on the matter, industry experts believe the acquisition could lead to some changes in the bank’s approach to serving the crypto industry.
BTCUSD inching closer to regain the $28K level on the daily chart at TradingView.com
The news of the acquisition also comes as the crypto industry faces increasing scrutiny from regulators and legislators, who want to introduce stricter rules and regulations. Many experts believe that the involvement of traditional financial institutions, such as banks, is essential for the growth and use of cryptocurrencies.
However, the move could signal a potential shift in the industry, with some analysts suggesting the move could lead to a consolidation of the crypto industry, as traditional financial institutions seek to gain a foothold in the industry.
It remains to be seen how the acquisition of SVB will affect the future of the crypto industry. However, it is clear that the move has raised concerns about the future of banking services for crypto companies, and how the industry will continue to evolve in the face of increasing regulation and competition.
– Featured image from The Business Journals
