First, it's a bit of a distraction OP's point was that they want a bank to be a bank - not that smaller banks are better than larger banks. They just happen to

First, it's a bit of a distraction OP's point was that they want a bank to be a bank - not that smaller banks are better than larger banks. They just happen to use a smaller bank. Second, there are over 4,000 banks in the US. The fact that fewer than 0.1% fail per year is actually a really strong argument on how much safer banks are. And finally that those few that did fail were insured by the US govt is the icing on the cake. None of this was true for crypto over the past few years.