Fannie Redux? Building credit banks save crypt banks

Fannie Redux? Building credit banks save crypt banks

The cryptoma market seems to have priced in the insolvencies of crypto companies last year. But the surviving crypto companies will pay back bank loans for some time to cover their positions.

The crypto prices continue to rise while the bears and bulls are reorganized.

Even the recent bankruptcy of Genesis did not subdue the enthusiasm of the crypto investors.

supervisory authorities are worried

In the meantime, at least two banks with a top -class list of cryptocurrency companies for customers with funds from mortgage banks are above water.

This could be a bullish signal for cryptocurrency in the overall picture. Despite the risks, it could signal the appetite of the traditional financial industry to crypto engagement. However, it is also a source of dismay for economic planners and regulatory authorities.

They fear that the growing connections between the cryptoscut and traditional finance "contagion" or "Spillover" risks that could endanger the entire economy.

It was this type of overdevelopment of the financial markets, which led to the financial crisis in 2008. Ironically, this happened as a result of the real estate market crash, which began in 2007.

A network of connections and fixed -interest derivatives (only a kind of intelligent contract without the blockchain) made the entire economy vulnerable when real estate prices skyrocketed.

The US budget loan system saves two crypto banks

According to a current report by Wall Street Journal, crypters have taken out loans in billions of housing buildings to cover their deficits.

The United States Federal Home Banks System (FLHB) has borrowed billions of dollars to two large cryptop banks. The organization was originally founded in the middle of the global economic crisis to support the housing loans.

One of them is the signature bank. Silvergate is different. Both are tradfi companies that have made the linchpin for shops with crypto, but still qualify for housing loans.

Although they qualify technically, their losses came from crypto last year and not from housing construction. The loans they have taken from FLHB may be correct on paper, but they almost certainly support their risky, highly wages in crypto.

This is the type of creative banking that causes the spillover risks that worry the financial supervisory authorities. You are concerned that this type of financial business models create technical details with several roles that destabilize the financial system.

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