Are Banks Legal Ponzi Schemes?

The Silicon Valley experience has got a lot of people seeing the true colours of banks, although this is something the crypto community has been hitting on for a long time now. So basically Silicon Valley went insolvent and doesnt have enough liquidity to pay its customers because they probably spent a lot of it doing business to the extent they don’t have liquid cash anymore and I read it somewhere that the regulations shut it down as a message to the crypto community. because, crypto companies are using the bank. I dont know how true that is, but I trust the crypto community they are probably going to create their own bank

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Now, back to the banks and being a legal Ponzi scheme, what do you think? In some ways I think its kinda, but for it to be regarded as a Ponzi scheme it has to be an investment right? But most people dot leave their money in the bank for investment but rather they leave it there for safe keeping. i think circle and other crypto companies left their money in the bank for both an investment and safe keeping. The bank works like this, people deposit their money into the bank, the bank makes investment with people’s money, when you want to withdraw your money, the bank uses the available liquid cash to pay you. Because its nearly impossible for everyone to want to withdraw all their money at once, if they do, then the bank will be out of business. So they are using customer’s money to become richer hoping that the customers dont request for all their money someday.

Well, if you were among the first set of people that withdrew your money before the bank went insolvent, you would consider yourself lucky, but the last people that trued getting their money but didn’t get it are considered unlucky having their money stuck there. We all have the impression that banks are the safest place to keep your money, but the banks are taking risks with your money, these risks might be considered safe and minimal, but as long as its a risk, its still a risk. Crypto offers the safest risks as long as you have the keys to your wallet and you are using a non custodial wallet. This way you are responsible for your assets.

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