The other day, California’s banking regulators announced the closure of Silicon Valley Bank (SVB). SVB ran into a major problem with a bank earlier this week, making it the second crypto-friendly bank after Silvergate Capital to announce closure within a week. Meanwhile, Elon Musk, who is involved in the cryptocurrency space, responded to a tweet recommending that he take over the SVB. Here are the details…
Can Elon Musk get the SVB?
As we reported on Kriptokoin.com, on Friday, US regulators announced the closure of Silicon Valley Bank (SVB) and confiscated all its assets. The move, which made the SVB the largest retail bank to fail since 2008, rattled global markets and stranded billions of dollars belonging to companies and investors. Amid this chaos, Razer CEO Min-Liang Tan suggested that Twitter should consider buying SVB and turning it into a digital bank. Interestingly, Twitter CEO Elon Musk responded to Min-Liang’s tweet by saying, “I’m open to ideas.”
I’m open to the idea
— Elon Musk (@elonmusk) March 11, 2023
Venture-focused platform SVB was shut down by regulators a day after its share price dropped 60 percent. It all started after the SVB announced on Thursday that it had sold a stock offering and securities to raise much-needed money as it struggled with falling deposits. In response, shares of the firm fell 60 percent in New York, and trading was suspended before regulators announced they were closing the bank.
The news was published by the California Department of Financial Protection and Innovation, which also calls the Federal Deposit Insurance Corporation (FDIC) a buyer. Greg Becker, head of SVB, said in a video message to employees that he was “working with banking regulators to find a partner for the bank.” He added that there is no “guarantee” that an agreement will be reached. Silicon Valley Bank was the 16th largest bank in the United States, with a total of 17 branches in California and Massachusetts.
Musk shared his financial institution vision
But Musk is keen on building apps for Twitter, and getting the banking infrastructure ready by acquiring SVB may prove too cumbersome. In addition, Musk recently shared his mission to make Twitter the largest financial institution. In an interview with Morgan Stanley executive Michael Grimes earlier this week on March 7, Musk said:
I think it’s possible to become the largest financial institution in the world by providing people with convenient payment options.
Elon Musk said he plans to offer a “strong financial experience” superior to PayPal. Therefore, Musk may consider moving to SVB. Meanwhile, the ripple effect of Silicon Valley Bank’s closure is likely to spread across the crypto industry. USDC stablecoin issuer Circle has reportedly received substantial exposure to Silicon Valley Bank. On the other hand, USDT stablecoin issuer Tether confirmed that they do not have any exposure to SVB.
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