Today saw the collapse of Iron Finance, issuer of a so-called “stablecoin” called IRON which is now worth much less than the dollar it is supposed to be pegged to. This is obviously bad, because the whole point of a stablecoin is to be stable. Stable coins are important. They are widely used by crypto […]
Today saw the collapse of Iron Finance, issuer of a so-called “stablecoin” called IRON which is now worth much less than the dollar it is supposed to be pegged to. This is obviously bad, because the whole point of a stablecoin is to be stable. Stable coins are important. They are widely used by crypto […]
Bitcoin is often seen as several things, ranging from a commodity to a currency, and even a solution to solving all financial problems in unbanked and underbanked regions. But very few people believe that Bitcoin has the potential to completely change reserve banking, freeing consumers from being enslaved to the banking ecosystem. While there are […]
TOO MANY BOBS Here is a story to help illustrate the risk involved in fractional reserve banking. Bob has ten thousand dollars that he doesn’t know what to do with, so he gives them to his best friend, Sam, to keep. Bob tells Sam that he doesn’t expect to need the money anytime soon, but […]
Updates to the letter Sign up for myFT Daily Digest to be the first to know about Letter news. Fractional reserve banking is a system in which only a fraction of bank deposits are backed by cash on hand and available for withdrawal. The system is risky (Opinion of July 23). For hundreds of years, […]
Stablecoins offer much sought-after stability in volatile crypto markets. It is sometimes even said that they affect the price of bitcoin drastically. Attached (USDT). However, it is more important to delve into the reality that some stablecoins are bad for bitcoin adoption. A sort of fractional reserve bank 2.0. Also Read: Tron-Based Tether Inflated To […]
U.S. multinational financial services firm Mastercard wants to apply fractional reserve banking principles to cryptocurrency, news patent application released Thursday, October 25 reveals. According to the document, released by the United States Patent and Trademark Office (USPTO), the payment processor plans to allow merchants to interact with what it calls “blockchain currencies” via a new […]
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What is fractional reserve banking? Fractional reserve banking is a system in which only a fraction of bank deposits are backed by cash on hand and available for withdrawal. This is done to theoretically develop the economy by freeing up capital for loans. Key points to remember Banks are required to keep on hand a […]
Note: This is the latest entry in the Acton blogging series, “What Christians Should Know About the Economy”. For other entries in the series, see this post. The term: Fractional reserve bank What this means: Understanding fractional reserve banking is easier if we separate what it is (which is quite simple to explain) and the […]
The 2008 financial crisis took many of us out of our comfort zones, leading to the argument for a complete overhaul of the monetary and banking system. This very concept was recently the subject of a petition in Switzerland. Known as the Vollgeld Initiative, its main purpose is to separate money creation from fractional reserve […]