Flock to Bitcoin: New York Metropolis Limits Deposits at Capital One and KeyBank

The New York Metropolis Banking Fee has determined to restrict deposits for 2 banks because the U.S. banking disaster deepens. Can Bitcoin ‘repair this?’

On Could 25, the New York Metropolis Comptroller, the Metropolis Mayor, and the Division of Finance voted to restrict deposits at Capital One and KeyBank.

The transfer comes after the banks “didn’t submit required plans demonstrating their efforts to root out discrimination,” in line with the Comptroller.

It’s the newest blow to the U.S. banking system, which has been beneath immense strain this yr.

New York Metropolis Banking Crackdown

Along with the crackdown on these two banks, three others have been voted in opposition to. New York Metropolis Comptroller Brad Lander voted in opposition to designating Worldwide Finance Financial institution, PNC Financial institution, and Wells Fargo from holding public funds.

“Banks looking for to do enterprise with New York Metropolis should show that they are going to be accountable managers of public funds and accountable actors in our communities,” he mentioned.

5 banks had didn’t adjust to New York Metropolis Banking Fee’s stringent laws. Nevertheless, the Fee did approve 26 different depository banks within the state for 2 years.

Banks should file certificates regarding their insurance policies of non-discrimination in hiring, promotion, and supply of banking providers to function in New York.

Furthermore, the 2 banks with frozen deposits weren’t small fry. Capital One held $7.2 million in Metropolis deposits on the finish of April throughout 108 accounts. KeyBank held $10 million in Metropolis deposits on the finish of April.

This yr’s collapses of Silicon Valley Financial institution (SVB), Signature Financial institution, and First Republic Financial institution have roiled the banking sector. The Federal Reserve responded with emergency loans to distressed banks, hinting that fee hikes might be over quickly.

There are rumblings that two extra U.S. banks, PacWest and Western Alliance, could be the subsequent to fall.

Moreover, America’s largest financial institution, JP Morgan Chase, is slashing round a thousand jobs at First Republic Financial institution after shopping for the failed agency this month.

Analysis additionally means that as many as half of the banks in America might be bancrupt.

Is Bitcoin The Reply?

Crypto proponents will argue that Bitcoin is the answer to all of this banking bunkum. Nevertheless, it nonetheless depends on fiat on and off-ramps, which implies involving banks.

Because of this, most retail banks and practically each central financial institution are in opposition to Bitcoin and crypto. It was spawned from the 2008 bank-induced monetary disaster and stays the most important risk to banks.