Federal officials should have protected both banks' uninsured depositors by following the law's carefully designed framework for dealing with failures of systemically important banks.
Allowing “stablecoin banks” access to the benefits of a bank charter without the obligation to carry federal deposit insurance creates moral hazard on steroids.
The megabanks that emerged relatively unscathed from the crisis are cited as proof of universal banking's benefits, but recent events have debunked that claim.