4 ms·
A regular bank is the same. If everyone withdraws, not everyone gets paid. FDIC offers partial protection, though.
by alisonkisk 5y ago
A regular bank is the same. If everyone withdraws, not everyone gets paid. FDIC offers partial protection, though.
- elliekelly 5y agoIt most certainly is not the same. Take WaMu, for example. I think it was the largest bank failure in the history of the United States and it was largely due to a bank run. Do you know how much money depositors lost? $0.00 And I don’t mean only up to the FDIC insured amount. Even those with WaMu deposits well in excess of FDIC coverage didn’t lose a penny. And it wasn’t thanks to the complex system of placing overnight deposits at various institutions for pass-through coverage in excess of the FDIC amount. Because do you know how much money the FDIC insurance fund lost paying out claims to WaMu depositors? $0.00 Do you know who did lose a lot of money? WaMu investors and shareholders. That is not even remotely close to how a stablecoin or crypto “bank run” would play out. Our banking system has built-in safety nets that work. Crypto safety nets don’t even exist.