The New York City Banking Commission has decided to delimit deposits for two banks as the United States banking crisis deepens. Can Bitcoin (BTC) ‘fix this?’
On May 25, the New York City Comptroller, the City Mayor, and the Department of Finance voted to delimit deposits at Financial resources 1 and KeyBank.
The move comes after the banks “failed to submit required plans demonstrating their efforts to root out discrimination,” reports by the Comptroller.
It is the latest blow to the United States banking system, which has been under enormous pressure this year.
New York City Banking Crackdown
Along with the crackdown on these two banks, 3 others were voted against. New York City Comptroller Brad Lander voted against designating International Finance Bank, PNC Bank, and Wells Fargo from holding public funds.
“Banks seeking 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 said.
5 banks had failed to comply with New York City Banking Commission’s strict controls. Nonetheless, the Commission did approve 26 other depository banks in the state for two years.
Banks must file certificates concerning their policies of non-discrimination in hiring, promotion, and delivery of banking services to operate in New York.
Furthermore, the two banks with frozen deposits were not small fry. Financial resources 1 held $7.2 Million in City deposits at the end of April across 108 accounts. KeyBank held $10 Million in City deposits at the end of April.
This year’s collapses of Silicon Valley Bank (SVB), Signature Bank, and 1st Republic Bank have roiled the banking sector. The Federal Reserve responded with emergency loans to distressed banks, hinting that price hikes may be over soon.
There are rumblings that two more United States banks, PacWest and Western Alliance, can potentially be the following to fall.
Furthermore, America’s largest bank, JPMorgan Chase & Co Chase, is slashing around a thousand jobs at 1st Republic Bank after buying the failed company this month.
Research likewise implies that as numerous as half of the banks in America may be insolvent.
Is Bitcoin (BTC) The Answer?
Cryptocurrency proponents will argue that Bitcoin (BTC) is the solution to all of this banking bunkum. Nonetheless, it still relies on fiat on and off-ramps, which means involving banks.
For this reason, most retail banks and nearly every monetary authority are against Bitcoin (BTC) and cryptocurrency. It was spawned from the 2008 bank-induced financial crisis and remains the largest threat to banks.