"Without depositors Banks will be having no funds to lend to the needy entrepreneurs. "
It doesn't work like that, it works the other way round. That is, loans create deposits - not deposits create loans. Otherwise, where do you think the money comes from in the first place to create those deposits (a bit like the chicken and the egg)? At least that's how it works in the UK[1], and pretty much all other major countries, including the EU, AIUI.
Anyway, it's not a war, fiat vs bitcoin. I think we'll end up with both fiat and crypto. Which is a good thing, IMO, as each will help keep the other honest. It gives us choice.
[1] http://www.monetary.org/wp-content/uploads/2016/03/money-creation-in-the-modern-economy.pdf
"In the modern economy, most money takes the form of bank deposits. But how those bank deposits are created is often misunderstood: the principal way is through commercial banks making loans. Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money"
Topic: Bitcoin Vs Fiat currency and development requirements (Read 140 times)
Yes you are right, that is why we cant just disregard Fiat currency it will affect all small business industry not only in the case that you stated.
The only possibily for me is a combined crypto+fiat currency on every country.
All things has disadvantages.
Theres no reason to forget fiat currency but also there is no reason not to support crypto aside from corruption on every country.
The only possibily for me is a combined crypto+fiat currency on every country.
All things has disadvantages.
Theres no reason to forget fiat currency but also there is no reason not to support crypto aside from corruption on every country.
Here at the bitcoin most of the members are supporters of bitcoin. It is true that bitcoin is much better option facilitating our transaction needs.
But if there is no fiat currency ; then there will not be any banking system. There will not be any depositors. Without depositors Banks will be having no funds to lend to the needy entrepreneurs.
So how the developmental works like installation of factories, institutions will be done because no individuals will be able to run businesses.
Big business houses will though be able to raise funds through ICOs but what about medium and small businesses.
But if there is no fiat currency ; then there will not be any banking system. There will not be any depositors. Without depositors Banks will be having no funds to lend to the needy entrepreneurs.
So how the developmental works like installation of factories, institutions will be done because no individuals will be able to run businesses.
Big business houses will though be able to raise funds through ICOs but what about medium and small businesses.
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