One of Iran’s largest private banks has fallen into bankruptcy, with the assets of more than 42 million customers being absorbed by Iran’s state lender, the bank Melli.
Ayandeh Bank declared bankruptcy on Thursday after it accumulated $5.1 billion in losses and nearly $3 billion in debt, local media outlet Iran International reported on Friday.
The bankruptcy was declared days after the Central Bank of Iran failed to save the bank, leaving officials with no choice but to close it, which operated 270 branches across the country.
More than 42 million customers were affected, the news update in Iran reported.
While CBI governor Mohammad Reza Farzin assured Ayandeh customers that they would recover their savings immediately, the incident highlights the risk involved in trusting banks that lend out customer deposits, operate fractional reserves and seek bailouts when things go wrong.
Failures in the banking system seem to be one of the Satoshi Nakamoto’s The motivations for the creation of Bitcoin, as evidenced by a message embedded in Bitcoin’s Genesis block referring to the UK government bailing out banks.
Meanwhile, one of the catalysts of Bitcoin’s growth in recent years is the local banking crisis in the US in early 2023, where Silicon Valley Bank, signature bank, and Silvergate Bank filed for bankruptcy or forced into liquidation.
The price of Bitcoin rallied from below $20,000 to over $29,000 that month as Public Trust in the US banking system disappeared.
Earlier this month, Reuters – mentioned A report from Morningstar – noted that US regional banks are still showing signs of financial stress despite strengthening reserves and customer deposits since March 2023.
Eight Iranian banks are at risk of dissolution
Iran’s banking system has become fragile due to extensive punishment, which is blocking access to international financial networks, restricting US dollar transactions and increasing risks to the local banking sector as the Iranian Rial continues to lose purchasing power.
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Earlier this year, the Central Bank warned that eight other local banks risk liquidation unless they implement reforms.
Iran’s crypto exchanges have no more problems, as nobitex suffered a $81 million hack in June.
It is one of the biggest contributors to Iranian crypto flows falling 11% Until July amid a series of conflicts with Israel.
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