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Topic: Fractional reserve banking - page 4. (Read 2450 times)

newbie
Activity: 43
Merit: 0
March 28, 2013, 06:39:59 PM
#3

Is fractional reserve banking (i.e. lending based on a fractional reserve) incompatible with BTC?



Fractional reserve banking is inflationary money--Bitcoin is not. Bitcoin is not a bank. Bitcoin is incompatible with fractional reserve banking.
member
Activity: 116
Merit: 10
March 28, 2013, 03:45:42 PM
#2
It's still possible, but to a much lesser extent.

An organization could offer a credit-line that's backed by Bitcoin. It could then extend that credit several-times over its actual reserves of Bitcoin. I would suspect that if anyone tried to do that though, it would be found out real fast and their reputation will suffer for it. I don't believe it will be possible to over-extend the credit to such degrees as we're seeing today with fiat, without the benefit of the printing press that fiat has.
newbie
Activity: 11
Merit: 0
March 28, 2013, 03:40:20 PM
#1

Is fractional reserve banking (i.e. lending based on a fractional reserve) incompatible with BTC?

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