"Signature was one of two banks that was widely used in cryptocurrency. Like Silvergate, which collapsed on March 8th, Signature had a network that let crypto companies transfer dollars in real-time. With both crypto banks gone, it may be harder to get back into dollars."
Is that true?
This is the third USDC partner bank to close this week, they only have 4 others left. High interest rates have weakened regular bank liquidity and the swings of stablecoin runs are toppling them like dominoes.
It is clear as day now that Crypto/stablecoins cannot bank in regular US banks and needs its own bank. Crypto is essentially a DDOS attack on a regular bank due to bank liquidity rules in the US. Normal banks are designed to hold a large spread of small accounts and thus keep a limited % of liquidity to cover withdrawal needs which are relatively low % for that type of customer. The rest of the cash is invested and produces a return.
Crypto has huge liquidity demands on small timeframes, especially when there are runs on exchanges. If normal banks are designed to move slowly and carefully to remain good stuarts of their depositors, crypto essentially trips that infrastructure with big swings.