On Friday, March 10, California Banking regulators announced the shutdown of the Silicon Valley Bank (SVB) Financial Group. SVB ran into major trouble with a bank run earlier this week and is the second such bank after Silvergate Capital to announce a shutdown in a week’s time.
As the developments unfolded, Min-Liang Tan suggested that Twitter should consider buying SVB and turning it into a digital bank. Interestingly, Elon Musk has responded to it stating: “I’m open to the idea”.
I’m open to the idea
— Elon Musk (@elonmusk) March 11, 2023
The move by California banking regulators seeks to protect depositors as the startup-focused lender faces a major crisis of existence. Things aren’t clear as to what plans Elon Musk could have with SVB.
However, Musk has been keen on building everything app X for Twitter, and it could be a great deal if he gets the banking infrastructure ready through the SVB acquisition. Furthermore, Musk also recently shared his mission of making Twitter the biggest financial institution.
In an interview with Morgan Stanley executive Michael Grimes earlier this week on March 7, Musk said:
“I think it’s possible to become the biggest financial institution in the world, just by providing people with convenient payment options.”
Elon Musk said that he is planning to provide a “powerful finance experience” that is superior to PayPal. Thus, if we join the dots, Musk might consider a move into Silicon Valley Bank. Of course, his team needs to check on the bank’s assets and to what extent can they help Twitter in that regard.
Silicon Valley Bank and Crypto Exposure
The Ripple effect of Silicon Valley Bank’s shutdown is likely to spread in the crypto industry as well. USDC stablecoin issuer Circle reportedly has major exposure to Silicon Valley Bank.
On the other hand, USDT stablecoin issuer Tether has confirmed that they don’t have any kind of exposure to SVB.
#tether doesn’t have any exposure to SVB
— Paolo Ardoino 🍐 (@paoloardoino) March 10, 2023
Some of the other players in the blockchain space having links to Silicon Valley Bank (SVB) include Blockchain Capital, Castle Island Ventures, Dragonfly and Pantera all had relationships with the bank.