[trompetenaccoun]

Circle needs those dollars highly liquid because otherwise they'd run into issues with their own customers. Exchanges can't give the customers T-Bills when they trade for dollars.

Also startups do not get paid in Treasury Bills when they strike deals. Clearly this system is flawed and prone to bank runs, which happen again and again. Because business people especially are aware of how banking works, they know the bank doesn't actually have the money in full. When there are issues, it's a risk leaving your funds with the bank instead of pulling them out.

[mkipper]

I don't know much about Circle and hold no resentment towards them, but this sounds very much like a "them" problem.

If you're operating a business that requires millions or billions of dollars sitting in a bank account, you can't plead ignorance around FDIC insurance and claim that you're just a small business trying to scrape by. Your business is open to a big risk, and there are well understood techniques for managing that risk. If you're a disruptive company who's trying to change the world and you don't fit into traditional finance, you find a creative way to deal with the risk. But if you _do nothing_ and keep all your money in a bank hoping they don't collapse, sorry, but that's accepting the risk.

I don't see this is a systemic failure. The system is set up to protect individuals and small businesses, with the expectation that larger companies can pay people to manage these risks. If Circle's CFO and finance team couldn't come up with a better solution than parking all their money at SVB, I'd argue it's a sign of Circle not being a viable business rather than a sign of some fundamental flaw with the banking system.

[em500]

Banks will extend all the credit you need if you have billions of t-bills as collateral. No need to actually have millions (let alone billions) in actual deposits.