As reported today, US officials are currently coordinating emergency talks to bail out troubled First Republic Bank (FRC) – for Bitcoin, this could mean rally time again if history repeats itself as it has in recent weeks. Already on Tuesday, BTC experienced a sudden rally after First Republic Bank released its quarterly report with devastating numbers.
Thus, the narrative that first appeared on March 10 was repeated. After the collapse of Silicon Valley Bank and Silvergate, the news of a bank failure acted as a trigger for several bullish moves in Bitcoin. And First Republic Bank could be another argument that strengthens confidence in Bitcoin and erodes confidence in the banking system.
This is why Bitcoin was created
With private sector efforts led by the bank’s advisers yet to reach an agreement, US officials have now apparently intervened in the situation surrounding First Republic Bank, Reuters reports. According to three anonymous sources, the Federal Deposit Insurance Corporation (FDIC), the Treasury Department and the Federal Reserve are reportedly involved in the talks.
Authorities reportedly began scheduling meetings with financial firms to organize a bailout in recent days. Notably, a bailout could take place again next weekend to soften the impact on the traditional financial system.
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The government’s involvement is likely to help bring more parties to the negotiating table, including banks and private equity firms, sources told Reuters on condition of anonymity. However, the US government reportedly prefers a deal with the private sector, but involvement is not yet ruled out.
U.S. officials believe a private-sector solution would be better than placing First Republic under FDIC conservatorship, two of the sources said.
“We are in discussions with various parties regarding our strategic options as we continue to serve our customers,” First Republic said in a statement. Meanwhile, the FDIC, Treasury and Federal Reserve remained silent.
Ultimately, the parties involved have not made a decision on how to proceed. According to Reuters, a deal is not yet certain. The most problematic aspect of the involvement of other major banks may be the initial situation.
According to the quarterly report for the first quarter, the raid on the bank was more dramatic than previously known. The bank had reported that customers had withdrawn nearly $100 billion in deposits in March. Only because other big banks stepped in with $30 billion in March was the worst averted for now. But even that was not enough.