Republic First Bank Closes: First US Banking Failure of 2024 Sparks Crypto Debate
Summary:
The Philadelphia-based Republic First Bank was closed by U.S. regulators, marking the first banking failure of 2024. It stirred up discussions in the crypto community as Bitcoin, Ether, and some altcoins saw a slight drop following the news. Post-collapse, the bank's deposits and assets were seized by the Pennsylvania Department of Banking and Securities and the FDIC. The bank's branches are set to reopen under Fulton Bank within a week. Last year, there were five U.S. banking failures according to FDIC data.
In the first bankruptcy of 2024, U.S. financial authorities have reportedly shuttered Republic First Bank, a banking institution based in Philadelphia. This event has trigged a flurry of discussions within cryptocurrency circles, especially as Bitcoin (BTC), Ether (ETH), and some altcoins experienced a slight downturn in response to this news. CEO of Zesh Marius Martocsan voiced his preference for Bitcoin amidst this banking turmoil, while crypto trader Pillage Capital described such banking failures as positive news for cryptocurrencies. Commentator Randi Hipper questioned how many more of these situations need to occur before people start self-banking.
Following the seizure of Republic First Bank by the Pennsylvania Department of Banking and Securities on April 26th, the Federal Deposit Insurance Corporation (FDIC) was designated as the receiver. As reported by Reuters on the same day, the FDIC is now responsible for nearly all of the bank's deposits and assets. Before its collapse, the bank had an estimated $6 billion in total assets and $4 billion in total deposits.
The bank's 32 branches located in New Jersey, Pennsylvania, and New York are expected to reopen under the management of Fulton Bank as early as next week. Last year, even whispers of potential banking failures led to small increases in Bitcoin's price, although its current value saw a minor dip in wake of this announcement.
Bitcoin's value decreased by 1.16% to $62,715, and Ether fell by 0.58% to $3,095, according to CoinMarketCap, with Bitcoin trading below the crucial $65,000 threshold in the last 24 hours. At the same time, altcoins such as Dogecoin (DOGE) and Solana (SOL) saw bigger declines.
Last year was challenging for the banking sector, with five U.S. banks declaring bankruptcy according to FDIC data. JPMorgan acquired First Republic Bank, another bank unrelated to the recently failed Republic First, after its initial recovery attempts proved unsuccessful in May 2023.
The Federal Reserve in March 2023 closed down Signature Bank due to "systemic risk" in a move intended to safeguard the U.S. economy. This action followed a directive shutting down Silicon Valley Bank, and a week prior, Silvergate Bank voluntarily decided to liquidate.
Source: CoinMarketCap
Published At
4/27/2024 5:20:28 AM
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