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Coinbase advised its customers to use other available payment rails as the exchange works on onboarding other banking partners.
Coinbase Global Inc (NASDAQ: COIN) has informed its customers that it will no longer support Signature Bank’s (NASDAQ: SBNY) real-time payment network dubbed Signet. According to a WSJ report, Coinbase informed its users that the collapsed Signature Bank’s payment network would no longer be available for on and off-ramping services. Following the announcement, Signature Bank’s shares declined approximately 22.87 percent to close Monday trading at $70.
According to a report by the Federal Deposit Insurance Corporation (FDIC) on Monday, Signature Bank will operate under New York Community Bancorp’s Flagstar Bank under an acquisition. Notably, Signature Bridge Bank was created by the FDIC on March 12, 2023, to take over the operations of Signature Bank after the New York State Department of Financial Services closed the bank and appointed the FDIC as the receiver. The FDIC noted that the former Signature Bank had total deposits of $88.6 billion and total assets of $110.4 billion as of December 31, 2022.
Today, we entered into an agreement with a subsidiary of New York Community Bancorp, Inc., to purchase and assume deposits and assets out of Signature Bridge Bank. Read more ➡️ https://t.co/bSshY93lBh. pic.twitter.com/b9RBvYtGF7
— FDIC (@FDICgov) March 19, 2023
However, Coinbase Global decided to move forward without payment services from Signature Bank in a bid to protect customers from further banking crises. As such, Coinbase advised its customers to use other available payment rails as the exchange works on onboarding other banking partners.
Moreover, a Coinbase spokesperson informed WSJ that customers would still be able to make crypto deposits, withdrawals and conversions from stablecoin USDC to US dollars seamlessly.
“While not ideal, this shows a need for an updated financial system,” the spokeswoman said.
Notably, Coinbase Global had announced a $240 million exposure to the collapsed Signature Bank but expected a full recovery after the FDIC takeover.
Coinbase Global and the Banking Market Outlook
Coinbase Global has enjoyed an inflow of retail and institutional customers since the collapse of FTX and the recent banking crisis. As the largest centralized exchange and publicly traded company, Coinbase Global has won investors’ attention due to its deep liquidity. Moreover, the United States government has previously made Bitcoin deposits, thus showcasing the level of liquidity on the exchange.
The banking crisis has been escalated by the collapse of Credit Suisse, and First Republic Bank (NYSE: FRC). Notably, shares of First Republic Bank plunged over 47 percent on Monday to close the day trading at $12.18.
This is not a cryptocurrency. It’s First Republic, the 14th largest U.S. bank. pic.twitter.com/vMLH6vnujD
— Fintwit (@fintwit_news) March 20, 2023
On the other hand, Bitcoin (BTC) and top altcoins were on the gaining end in the past few days. According to our latest crypto market data, Bitcoin price has gained over 16 percent in the last seven days to trade around $28k. Ethereum (ETH) price, on the other hand, has gained over 5 percent to trade around $1,763 on Tuesday.