The conspiracy theory (sort of mentioned by Balaji) that they knew the small banks are insolvent and are intentionally letting them fail so as to better and more easily pave the way to CBDCs sounds more true by the day.

With FedNow, you get instant settlement between banks - bank runs now become even more challenging to the small guys.

What easier way is there to catch up with your authoritarian competitors than to use unelected officials to fabricate a crisis so that your authoritarian response to it seems justified?