The New York City Banking Commission has decided to limit deposits to two banks as the US banking crisis deepens. Can Bitcoin ‘fix this?’
On May 25, the New York City Comptroller, Mayor, and Department of Finance voted to limit deposits at Capital One and KeyBank.
This move comes after the banks failed to «submit necessary plans that demonstrated their efforts to end discrimination,» according to the Comptroller General.
This is the latest blow to the US banking system, which has been under tremendous pressure this year.
New York City Banking Crackdown
In addition to the crackdown on these two banks, three others voted against it. New York City Comptroller Brad Lander voted against naming the International Finance Bank, PNC Bank, and Wells Fargo for holding public funds.
«Banks that want to do business with New York City must demonstrate that they will be responsible managers of public funds and responsible actors in our communities,» he added. said.
Five banks failed to comply with the New York City Banking Commission’s strict regulations. However, the Commission approved 26 other depository banks in the state for two years.
Banks must file certifications regarding their non-discriminatory hiring, promotion and delivery of banking services policies to operate in New York.
Moreover, the two banks with frozen deposits of small fry were not. Capital One had $7.2 million in City deposits at the end of April across 108 accounts. KeyBank had $10 million in City deposits at the end of April.
This year’s collapse of Silicon Valley Bank (SVB), Signature Bank, and First Republic Bank has jolted the banking sector. The Federal Reserve responded with emergency loans to troubled banks, signaling that rate hikes may soon be over.
There are rumors that two other US banks, PacWest and Western Alliance, could be the next to fall.
In addition, there is the largest bank in America, JP Morgan Chase slash about a thousand jobs at First Republic Bank after buying the failed firm this month.
Research also suggests that as many as half of America’s banks may be insolvent.
Is Bitcoin the Answer?
Crypto proponents will claim that Bitcoin is the solution to all of this banking fundamentals. However, it still relies on fiat on and off-ramps, which means bank removal.
For this reason, most retail banks and almost all central banks are against Bitcoin and crypto. It emerged from the banking financial crisis of 2008 and remains the biggest threat to banks.
Adhering to Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate and timely information. However, readers are advised to independently verify facts and consult a professional before making any decisions based on this matter.
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