Major US banks will NOT be rendered insolvent. The fed won't allow it. They are literally too big to fail. They'll just be bailed out.

US banks have deposit insurance of $250k per account for retail banks.

https://www.fdic.gov/deposit/deposits/faq.html

Yes, and in 1Q2017, the fund held $84.9E9. Meanwhile, in the US, gross private savings total $4.64 trillion, while personal savings total $1.06 trillion.(Sep 11, 2019)

What happens when a major bank goes under and completely depletes the FDIC fund? (e.g. Bank of America)

Another key aspect of monetary metals is lack of counter party risk. When you deposit money with BoA, it is no longer yours; you become an unsecured creditor of the bank. BoA's derivatives counter parties are senior to you, so they will get paid first if say interest rate swaps go against BoA, and they need to post more collateral to that counter party.

Also, the problem with rates 'normalizing' is the magnitude of outstanding Treasury debt, and the fraction of GDP that the interest payments represent. 5% would be devastating, even though historically, that is a typical rate.

If you're not transacting for physical cash, isn't your money going directly into an account at another bank?

Unless people are withdrawing mass amounts of cash, I'm relatively certain you can't have bank runs against the banking system as a whole, you can only have runs against a particular bank.

Without physicality though, it's not hard to restrict automatically the demand. Capital control measures...