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FDIC Announces First Coronavirus-Fueled Bank Failure in the United States

2 mins
Updated by Gerelyn Terzo
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In Brief

  • The First State Bank of Barboursville in West Virginia has shut down due to the economic fallout from the coronavirus pandemic.
  • It was acquired by another bank along with its $139.5 million in deposits.
  • Could this just be the first domino to fall in the banking world?
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A financial institution in West Virginia is officially the first bank to go under due to the coronavirus pandemic.
The FDIC has announced that a ‘small bank’ is closing its doors in West Virginia. [MarketWatch] The closure has been directly tied to the economic fallout of the coronavirus pandemic. Bank

The First of Many?

The First State Bank of Barboursville in West Virginia has closed, according to the FDIC. Holding some $152 million in total assets, it also held some $139.5 million deposits. Those deposits will now be acquired by MVB Bank Inc. of Fairmont, W. Va. The closed branches of the First State Bank will be opened as branches of MVB, the FDIC said. According to some cryptocurrency analysts, this is what was to be expected as part of the economic fallout: bank failures. Luckily, this is only one bank, so the deposits were protected. But what happens when it’s a dozen or so banks or more? As analyst Joseph Young (@iamjosephyoung) writes, “The domino is shaking.” BeInCrypto previously reported that U.S. banks now have 0% reserve requirements. The Federal Reserve has been desperately telling Americans not to take out cash out of fears that banks might run out. The financial body has tried to assure Americans that it has an “infinite amount of cash.” The money supply of the U.S. dollar has doubled since 2008 when BeInCrypto reported it on Feb. 6. That number is today many times higher with the Fed printing some $60M every minute. 

Financial Sovereignty Is Key

Depositors in U.S. banks have every reason to worry about their money. That’s why financial sovereignty is so important—it gives individuals direct control over their money. For the cryptocurrency industry, the case for Bitcoin has never been stronger. However, amid a time of financial uncertainty, many Americans are sadly struggling to make ends meet. If the pandemic worsens, the situation at the First State Bank may be just the initial domino to fall before many others as Americans request their money in cash. The Fed believes itself to have ‘unlimited cash,’ but it remains to be seen whether it can hold up to that promise. For now, the future of traditional banking seems uncertain.
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Anton Lucian
Raised in the U.S, Lucian graduated with a BA in economic history. An accomplished freelance journalist, he specializes in writing about the cryptocurrency space and the digital '4th industrial revolution' we find ourselves in.
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