Gemini Exchange co-founder Tyler Winklevoss said: The U.S. banking system is a modern caste system where those with the top bank are protected and the rest are at risk.
On Twitter on March 17th threadWinklevoss categorized U.S. bank customers into those banked by bulge bracket banks, regional banks, and non-bank banks.
Bulge Bank is a financial institution that the U.S. government considers to be a Systemically Important Financial Institution (SIFI). In other words, a bank too big to fail.
Winklevoss said customers with uninsured deposits at these banks usually don’t need to worry as the government will help them in most cases.
However, those with uninsured deposits at local banks are at greater risk. Whether the government will boost their deposits will depend on the impact of such bank failures on the larger banking system.
He said decisions about which bank to save are made by the Federal Deposit Insurance Corporation (FDIC) Board, the Federal Reserve, the Secretary of the Treasury, and a majority of the President. This means banks that aren’t worth enough may be denied protection.
Winklevoss added that there are “no guarantees” for customers.
For context, the government had to step in to save the customers of Silicon Valley Bank (SVB).
The third category, on the other hand, has no bank deposits and is therefore ineligible for the FDIC’s $250,000 minimum deposit insurance. “This is not a level playing field,” he concluded.
In another tweet, Winklevoss Said:
“The U.S. government has done a great job averting the banking crisis, almost as great a job as they started it.”
Meanwhile, several members of the cryptocurrency community said Bitcoin (BTC) would solve the problems Winklevoss highlighted.
