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Hello this is Matt on the moon family Sedan channel the second to largest bank Collapse in the history of the United States just happened yesterday on Friday And I I was covering everything that had Led up to that point in a video Yesterday but oh there's more to say Today this is heavily impacting uh the Crypto in general and also David Schwartz who is Ripple's CTO and of Course uh the co-creator of xrp and The Xrp Ledger uh when asked you know does Ripple have any exposure to this bank Which is Silicon Valley Bank does Ripple Have any exposure to this and David Schwartz stated that uh Ripple is going To be releasing a statement on this Issue and that he couldn't talk about it Any further I'll show you his exact Tweet a little bit later in the video But that was the message And that's kind of curious Um you know if they do because mind you And I just to be clear at the outside of The video I'll explain why this is Potentially a big deal and again since We don't have sufficient facts maybe Maybe it won't be got to hear from Ripple first but mind you that last time Anyone from Ripple cited how much money Ripple has in the bank it was it was Brad garlinghouse it may have been over A year ago at this point I remember Exactly when but he stated publicly that

Ripple had one billion dollars with a B In the bank Which bank or is it multiple Banks now That we don't know and this matters Because this bank went to kaput they are No more the federal government has taken Over Silicon Valley Bank uh on on Friday And it's a big problem so I'm gonna Break it all down for you and we've seen Some crazy stuff with uh with some Stable coins as a result of all this too And I'll explain but before going Further do you want to be clear I do not Have a financial background of any kind I'm not offering Financial advice and You definitely should not buy or sell Anything because of anything I say are Right I'm just an Enthusiast who enjoys Making YouTube videos about crypto Related topics but just as a hobby and Just for fun all right so let's let's Make sure everybody's caught up on on The fundamentals the things that you Absolutely must know and I'm going to Try and get through this as concisely as Possible to not belabor the point Especially since some of this I talked About literally yesterday but here's What you must know Is Silicon Valley Bank Which failed literally yesterday on Friday it's it's Saturday morning as I'm Recording this video it's uh what time Is it 509 a.m Central Standard Time

That's the time zone that I'm in anyway Um well they failed and why did they Fail well first of all you gotta Understand what fractional Reserve Banking is fractional fractional Reserve Banking is is the fortunately the Monetary system embraced in the United States and not only in the United States So what I'm about to describe to you is Legal what I'm it's like this is just How Banks work and it's kind of Bonkers But this is how Banks work it's truly a Trust system Um without trust everything just falls Apart you end up having Bank runs so With a fractional Reserve banking when You say you deposit it you know a Hundred dollars into a bank uh the bank Only has to keep ten percent of that on Hand they can loan out the other ninety Percent so they can loan that out or They can invest in things like T bills And and so in the case of Silicon Valley Banquet they did actually not that they Loaned out every you know 90 of the Deposits that they took in Um they did loan out you know some of The money that came in obviously and Poof new money into existence Effectively but uh but what they did and This is what ultimately absolutely Destroyed them is they invested in a Bunch of government bonds at a very low Interest rate I can't remember it might

Have been like one percent one point two Percent something like that but that was Back before the government started Engaging in rate hikes so the the United States federal government as as I'm sure Pretty much all of you are aware to this Point uh for you know roughly years so I Can't remember the first hike was but Roughly a year then increasing interest Rates and so you know the amount that is Going to be paid out at that lower Interest rate versus what you could you Know government bonds would pay out now A big disparity there you see you can See right there there's already an Obvious problem in terms of the Gap now In theory it wouldn't necessarily be a Problem because if you just hold the Bonds through the term that you assigned To contractually which it may have been I'm pulling from remember here but it Might have been like a four-year term That with that Silicon Valley Bank Signed Um if you hold it through that then okay You've got it and the funds are there But what about the world where the Interest rates are much higher and this Is where you have a problem if you have A bank run which is what happened now Why did Silicon Valley Bank have a bank Run well they had a bank run because This is this isn't just your ordinary Bank so this is a bank that

Um caters heavily as I was mentioning Yesterday in the video they cater Heavily to the tech sector I mean they Are Silicon Valley Bank this will Surprise no one right so they cater Heavily to that crowd and Tech sector Ain't been doing so hard I don't know if You've been following that but Tech Sector not been doing so hot and so all Sorts of businesses were kind of scaling Back taking money out and it got to the Point where Um the bank couldn't cover withdrawals And not because they did anything Illegal no no they they operated within The law so far as I've seen if they did Anything illegal then somebody pointing To that news I've seen nothing on that It looks to me that they followed the Letter of the law as it pertains to Fractional Reserve banking but that's a Big risk when you're talking about Putting that much customer funds because It's hinging on you're counting on People uh you know in the tech sector Your customers not wanting tremendous Amounts of money back and the government Not raising interest rates which they Did So that didn't go well that's why we Ended up in the position that we're in Right well they ended up in the position That they're in but why why might this Impact uh Ripple well it depends it just

Will it won't it well let's wait until We see Ripple statement I can't say for Sure but here's what you need to be Aware of in the United States there's Something called the FDIC which ensures Deposits Um up to 250 000 and so for a typical Individual vigil most people won't have That much money in your bank and so Great you're actually covered and that's Fantastic I don't know exactly how long It would take you know for you to get The funds back but the point is you Would actually be covered and so you Should be able to sleep easy but I saw a Figure and it was something like 97 of Deposits would not be covered by the FDIC they're not Insurance 97 and why Because they'd be over that 250 000 Threshold you're talking about Businesses in the tech sector So what do you do if you're a business Your bank is now insolvent and you can't Operate what happens and so to what Degree is that going to rope a lot Throughout the economy that's a whole Different kind of worms like that's a Whole different conversation right there Um but only in part because that brings Us back to Ripple if Ripple has a Substantial amount of Holdings in the Bank that goes to have a bad day they're Going to have a bad month they're going To have a bad year no I'm not saying

That they do maybe we'll find out that They had little uh little in there or Nothing although if the answer is Nothing I don't know why they're even Putting out a statement that's why I'm Hazarding a guess and it is just a guess But I'm hazardous that they have some Amount of money uh in that bank and so Imagine it's millions and millions and Millions and then like you're guaranteed 250 000 that's it and you're a business Again 97 percent of deposits roughly That's a figure I saw not covered That's what's being reported by the Mainstream media That doesn't sound good so I don't know What's going to happen and I'm not I'm Not saying hey be alarmed you know Ripple script I'm not saying anything Like that I'm saying literally just the Facts that we know that there's going to Be a statement from Ripple we don't know What's going to be cited in that Statement and just you know noting that Should it be the case that they had a Billion dollars in the bank uh at Silicon Valley Bank that's really bad That's tremendously bad no I'm I I I'm Not even speculating that they do I'm Just stating the obvious you can Understand the concern here I just want To make sure that everybody understands What's going on here and this has been Tremendously negatively impacting uh the

Crypto space Uh I'm sure if you've been looking at You know just crypto in general it's Been all over the place mostly down over The last several days or so for various Reasons now as it pertains specifically To uh what's happening with the stable Coins oh let's talk about this a little Bit too because this is just It's just insane so Usdc Um which again is allegedly 100 backed And I say allegedly because I look I Don't have any reason to believe that It's not 100 backed they've also not Proven that it's 100 backed same with Tether they've never had that level of Transparency so it's just like oh Lord Ghosts are telling the truth uh but you Know what we did find out we found out That uh usdc Um a lot of a portion of that backing I Think it came out to around eight Percent ish of the the total Uh turns out that uh that was backed by Money that is it that is in Silicon Valley Bank which just failed Kid you not so the bank goes belly up And then usdc starts tanking and here Let me pull up I'm going to pull up usdc On um actually on coin market cap Because earlier maybe they fixed the Problem now but but a couple hours ago When I was mapping out content for this

Video I checked on Litecoin watch and it Wasn't reporting accurate numbers so I Just pulled up coin market cap which I Don't normally do I don't like their Website as much I don't like the the Background they have all sorts of fact Figures that I like to look at regular Where I have to scroll down it's just Annoying I don't like the light but Anyway Um so the 24 hour low for usdc which is A stable coin which is supposed to be One dollar got down to 87 cents 87 cents folks Uh that's some Panic stuff right there And it's currently at the time of Recording this at 91 cents this is no Good Um now Dai another stable coin Which I don't pretend to know a ton About but I did learn today that a Dai Is in part or largely are in part uh Backed by usdc how about that a stable Coin backed by a stable coin which is Backed by the dollar which is in a bank That's insolvent that's a fun time so Anyway Can you believe this is real life so Di And by the way the reason I don't know a Ton about these stable coins is I don't Use them I've never used a stable coin I'm a dude that doesn't trade so people That are more likely to trade I can see Why they'd use them but for me I buy

Stuff and then I put in Cold Storage That's it so I have no personal Experience with stable coins if I can Avoid using them for the rest of my life I'm gonna do that Um there might be a reason I'll use it In the future but Maybe for something real short term but I I don't like them I really don't like Them I don't feel safe with them I like Cold storage so anyway uh Dai is also it Lost its pick so you've got usdc and the Stablecoin Dai which they're both depict It's currently at 94 cents and it didn't Go quite as long I don't think I got That yeah it got down to 89 cents And I'm not convinced that this is the End of the world necessarily for usdc But we also don't have all the facts so I can't say that definitively either all I can say is that it's an s word show it Is an absolute mess out there And now tether is reaping the benefits Who would have thought that tether would Be perceived as the safer stable coin When compared to usdc who would have Seen that cover just like half a you Know half a week ago Um So tether's currently at one dollar And one sit it was this is High um as One dollar and three cents so as usdc is Going down tether was going up because Heather became viewed as the safer bet So it is what it is man I just what

What a freaking mess here Um and you can see I I for those of you The character look I'm gonna pull up This articles from The Daily Mail and It's got some pictures and you can see Here's Silicon Valley Bank and there's Just this line of customers trying to Get their funds out and so there's one Picture let me scroll down there's some More here apparently it wrapped around The block from that's what's being Reported anyway there's a video I think Coming up in a second here from like a It might have been on Twitter that they Embedded here but it's just a ton of Customers trying to uh get uh here I can Hit play I don't know what's gonna do Sound though uh yeah so you can see here It's just like a ton of people like I Just I feel for them I mean can you Imagine if this happened to you that's Devastating what if that's everything That you have in a bank So Wow and it's just crazy and so this in Theory could happen any bank but it was More risky for Silicon Valley Bank Because they're they cater heavily to a Specific sector the tech sector so if You've uh like a more if you have a Customer base that more you know uh is More of a tapestry of like what composes The entire United States economy then This wouldn't be happening to you but

They cater specifically to the tech Sector which is having a hard time at The exact same time that interest rates Are going up and they've got this money Locked in government bonds so then what Are you gonna do like you're just you're Completely screwed at that point and and Now the federal government has taken Over Silicon Valley Bank all happened in A day I mean there were the stories Technically started Wednesday when you Know there's you know cracks in the Foundation if you will but uh it's all Quickly like snap a finger you know from Friday rolls around Insolvency and and that that's all she Wrote So that's that's some ridiculous stuff Um and then there was also this so this Was from Circle this is at 5 50 p.m in The evening yesterday Um and this is part of what set off some Of the scare stuff here Um Circle tweeted out Silicon Valley Bank is one of six banking Partners Circle uses for managing the 25 portion Of usdc reserves held in cash while we Await Clarity on how the FDIC Receivership of svb will impact its Depositors Circle and usdc continue to Operate normally Uh yeah so that led to attorney John Deaton retweeted that and he said I'm Sorry but this is not a confidence

Inspiring statement that's for damn sure Um then David Schwartz also retweeted That that tweet from Circle David Schwartz said uh great quick question Though are you solvent Which is a good question and um Not not looking not looking like there's A lot It's not looking like they're solventy Right and then somebody asked them does Ripple have any exposure and this is Where David Schwartz said We're going to issue a statement I can't really say anything until we do That officially Okay so I hope if Ripple does have any Exposure which I'm again I'm hazarding I Guess I don't know but I'm Hazzard and I Guess they have at least some exposure Or else why even put out a statement I'm Hoping that it's extremely minimal I Mean you know like they had exposure to Ftx2 but it was also almost nothing Compared to you know the totality of What the company's worth it was like a Rounding error effectively I can't Remember if it was like 10 or 12 million Dollars worth of xrp at the time is it Was something that's big to a normal Person but for a company of that size It's nothing it's surrounding error so It just this is this this is the Situation we find ourselves in that's it So

I don't know as soon as we find out what It is I'll be happy to put out a video As quickly as I can covering what this Statement is I'm hoping it's good news I'm optimistic for that but can you Imagine the disaster scenario where all Of that all of that ends up you know That billion dollars that they have uh All of that is what what what's what's Going to happen because my understanding Is that Um even if it's not all lost given that The bank is shut down sorting out and Getting your money back so you probably First of all you probably don't get all Of it back but even if you do my Understanding is that could take like Three or four years Like so what do you do if you're a Company in the meantime that's the Question it's like what would you do uh I guess go out of business I mean you Can try and scale back but to what Degree can you even do that so that's Why again I'm hoping that that's not the Case but and look I'd be surprised if it Is so I'm not like I'm just trying to be Very factual or like laying out the Facts not to scare anybody whatsoever But Um that's potentially in a worst case Scenario what we're looking at it's not That I think that we have the worst case Scenario I'm not even predicting that

But this this is what we're working with At this particular moment Uh crazy stuff here folks so that's the Update for now I'll keep you posted as Things continue to unfold but wow I just keep I can't I can't help but Wonder what's going to happen with usdc Now presumably at some point It's going to get repacked I hope Because the only way that this thing Completely unravels because this is this Is equivalent to a banker this is people Trying to get out of usdc And that's driving down the price and The only way that this would actually Completely fail is is if if enough People pull out where you finally get to The point where somebody actually can't Pull out so like don't forget there was A bank run on binance in December but Bank runs don't always result in Failure If there's if the assets are there and People can retrieve them when they want Then eventually the Panic subsides and Then it just goes back to normal and Funds even flow back in So when it comes To Circle if it's truly backed and if People if 100 of people at any moment Truly can get their money out then good But that's kind of questionable given That something like eight percent I Think it's eight percent ish of what That's usdc is is held by the Silicon Valley Bank

Are the fear is coming from for sure It's pretty obvious to see that for for Usdc and Dai but is it actually going to Be the end of the world for for the coin I'm not going to predict that I don't Know I hope not I don't like to see These collapses And in that case assuming they are Completely backed which again they Refuse to prove which I just makes me Not trust them but if even if they are 100 packed this isn't really their fault You know this is the bank making a Bad Bet so and even if the bank didn't break Any laws that was a big risk what they Did with the government bonds I just All right I'll stop yammering on you Guys let me know what you think but That's the update I'm not a financial Advisor you should not buy or sell Anything because of anything I share Right that would be a very very very bad Idea until next time to the Moon family Sedan


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