Bankruptcies and bank failures such as Silvergate, SVB and Signature Banks, and the impact of digital money (Part 1)

The present economic environment is witnessing a notable increase in bankruptcies, indicative of a wider financial instability. With traditional government debt at all-time highs in many jurisdictions, simply printing more money (putting financial structures under mounting pressure) may well not be an option this time and, resultant from this, means there is a rising focus on digital currency and its potential to transform the financial landscape. In the US, bankruptcy filings surged by 16% for the year ending March 31, 2024 - reaching 467,774 cases - with business bankruptcies rising sharply by 40.4%. This trend was exacerbated further by the tightening of US monetary policy back in 2023 which contributed to the collapse of Silicon Valley Bank in a mere 48 hours due to a run on deposit amid rising interest rates. Banks with heavy investments in long-term assets such as mortgage-backed securities and Treasury bonds saw significant declines in asset values. In February 2024, company in…