[oarabbus_]

Let's not act like Circle's options were either to put 3 billion in one bank, or open 1200 accounts at 1200 banks.

-Purchase high-limit cash insurance from a Reinsurer like Lloyds of London or Berkshire Hathaway up to their underwriting limit, perhaps $100M. Do this across 4-5 different banks with 4-5 different reinsurers.

-Put the remaining $2-2.5B into mixed US Treasuries of varying maturities

[dlubarov]

They did already have 77% of the collateral in short-term T-bills, and the 23% in cash was spread out across multiple banks. They held $3.3bn at SVB, but that's out of $42bn total.

[oarabbus_]

So then it sounds like they probably had 10-15 banks (entirely reasonable for them to be expected to open this many accounts at unique banks, given their business model) which is a far cry from the 1200 OP complained about.

If your entire business model revolves around moving multiple billions of dollars via an asset-backed stablecoin model, it's reasonable to expect you to have dozens of bank accounts, in at least 3 time zones, and likely more.

I don't know why people (not saying you specifically) seem to have this expectation any entity should be able to deposit billions of dollars risk-free at a single institution.

Ironically it's often the same people who can intuitively grasp why to hold your crypto across multiple wallets, who cannot fathom that infinite $ cannot be deposited at a single bank, without risk.

If you're leaving 7 to 9+ figures in a single account, then either buy custom insurance, or only do business with banks which offer excess insurance.

[dlubarov]

I'm not sure any private insurance exists that can cover a $42m deposit?

[trogdor]

It does. In the context of the financial services and reinsurance industries, $42 million is not an enormous amount of money.

[dlubarov]

Sorry I meant $42b, which is the amount of USDC collateral held by Circle.