The crypto fallout from 2022 with Celsius, Voyager, 3AC and FTX continues to be far reaching and spreading to traditional finance.

On March 8 Silicon Valley Bank surprised investors with news that it needed to raise $2.25 billion to shore up it’s balance sheet.

The second largest bank collapse in U.S. history then took place over the next 48 hours as customers made a run on the bank withdrawing $42 billion in deposits by end of day Thursday before federal regulators shut it down.

All this happened in the wake of Silvergate Capital saying Wednesday afternoon that it will wind down operations and voluntarily liquidate its bank after a collapse in the crypto market saw billions in deposits leave the bank in recent months.

Silvergate was a cryptocurrency focused bank that had partnerships with FTX, Alameda Research, Galaxy Digital and Coinbase.

Although Silicon Valley Bank catered to tech startups there was an exposure to crypto through Circle the company issuing the stablecoin USDC. Circle has $3.3 billion in reserves tied up at SVB. This is money backing the value of USDC and if it was to be lost as part of SVB’s failure, it would mean a financial loss for Circle.

In the early Saturday morning hours the Silicon Valley Bank failure caused stablecoin USDC to de-peg from $1. The price dipped to almost $0.88 before recovering to around $0.96 at the time of writing. The USDC instability also caused a domino effect on DAI, USDD as they de-pegged as well. As part of the ripple effect Coinbase paused USDC : USD conversions until Monday morning.

The saga of Silicon Valley Bank is an example of how the surge in interest rates over the last year continues to upend financial institutions and companies that thrived in a world of low-interest rates.

Janet Yellen described rising interest rates, which have been increased by the Federal Reserve to combat inflation, as the core problem for Silicon Valley Bank. Many of its assets, such as bonds or mortgage-backed securities, lost market value as rates climbed.

Yellen said she expected regulators to consider “a wide range of available options,” including the acquisition of Silicon Valley Bank by another institution. So far, however, no buyer has stepped forward.

The parallel between crypto and traditional finance is becoming more apparent. Many large banks are now offering services related to cryptocurrency including holding digital assets or trading them on exchanges. These banks offer these services in order to provide customers with access to a wide range of investment options and to capitalize on the growing demand for crypto investments.