First Citizens Bank set to complete SVB takeover
The US Federal Deposit Insurance Corporation (FDIC) facilitates a purchase and assumption agreement between SVB and First Citizens Bank. The deal will enable the assets, loans, and deposits of SVB to be taken over by First Citizens Bank.
Silicon Valley Bank (SVB), one of the numerous financial institutions affected by the ongoing US banking crisis, is on the verge of completing a purchase and assumption deal with First Citizens Bank & Trust Company, a Raleigh, North Carolina-based lender ranked as the 30th-largest bank by assets in the country as of 2022.
As reported by crypto.news, US regulators put SVB into receivership earlier this month as it was experiencing a severe liquidity crisis. The bank did not offer crypto custody services or fiat on-ramps while it lasted. However, its collapse came as a blow to many crypto businesses, such as USDC issuer, Circle, a16z, Pantera, and others that banked with it.
According to FDIC, SVB had about $167 billion in total assets and roughly $119 billion in total deposits as of March 10. The takeover deal included purchasing about $72 billion worth of SVB’s assets at a discount of $16.5 billion, while about $90 billion in securities and other assets remain in the FDIC receivership.
A glimmer of hope for SVB users
Through the purchase deal, depositors of SVB will automatically become customers of First Citizens, and all deposits assumed by the latter will continue to be insured by the FDIC.
Similarly, the regulator has clarified that the 17 branches of SVB across the US will resume operations as First Citizens Bank on March 27. The customers of SVB should continue to use their current branch until full-service banking at all First Citizens branches is enabled.
While US authorities continue to choke off access to banking services for web3 projects, experts have argued that the crypto industry will continue to wax stronger and ultimately replace traditional banks in remittance in the near future.
The banking turmoil has triggered a resurgence in the price of bitcoin and other cryptocurrencies in the past 30 days. The global crypto market cap now stands at $1.16 trillion, according to CoinMarketCap.