With the pause in global operation, economic recession and rising unemployment coronavirus pandemic have triggered, time is set for Bitcoin reign as the First State Bank in Barboursville, West Virginia, has shut down operations, triggering questions.
A tweet by Federal Deposit Insurance Corporation (FDIC) announced the shutdown but explained that the First State Bank did not shut down because of coronavirus pandemic. They said that the bank’s failure was not because of the current health emergency, but financial issues were long-standing.
This bank failure was not a result of the current health emergency. Financial issues were longstanding. This is very clear in our press release. https://t.co/4zefbHBAki
— FDIC Gov (@FDICgov) April 3, 2020
Operating with financial difficulties since 2015
This was announced by the Federal Deposit Insurance Corporation (FDIC), revealing that it has brokered First State bank sale to MVB bank selling all the assets and four branches of First State bank to MVB. According to the FDIC announcement, “The First State Bank has experienced longstanding capital and asset quality issues, operating with financial difficulties since 2015.”
Reportedly, MVB bank did not pay a premium for deposits as revealed by a regulatory filing as all First State Bank branches now resume as MVB locations working during regular business hours. FDIC warned, however, that customers who are to transact in the bank practice social distancing and use online and other alternative banking options as the pandemic continues to ravage.
Before the First State bank shutdown, the firm had been struggling with financial issues since 2015, FDIC, and more as it has not recorded any profit since 2013. Last year, the bank was said to lose around $3.7 million.
Further meltdown might propel Bitcoin reign
Even with the bank’s shutdown not linked to coronavirus, the pandemic has no doubt been eating deep into the global economy as over 1 million confirmed cases of the virus have been recorded with around 60,000 deaths.
Several citizens are also becoming jobless as governments try to arrest the virus ordering people to stay at home forcing businesses to close and reducing demands generally. The current situation is likened to the recession of 2008, as this will be worse.
In the 2008 financial crisis, over 300 banks shut down owing to the economic crisis with many others kept afloat through the government’s intervention. The tourist sector is most affected by the pandemic as airline firms are requesting bailouts.
Bitcoin reign on the horizon?
Bitcoin reign, however, looks imminent with all these happenings as its peer-to-peer nature; likewise, other cryptos exist to avoid incidents like this. The crypto network is built such that there are no needs for intermediaries or third parties like banks do operate, making them an alternative.