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 […]
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 […]
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 […]
Vollgeld “Full Money Initiative” of Switzerland I can pretty much guarantee you that the biggest story that isn’t covered by the mainstream business press right now is that Switzerland to hold referendum to consider ending fractional reserve banking (!). Yes, you read that right. This paragon of the banking sector votes on the advisability of […]
How money is created and used In the US fractional reserve banking system, banks are required to keep a fraction of their deposits in reserve but may lend or invest the rest of the money (i.e. excess reserves) for prudent business purposes. . This leverage explains how $ 10,000 in new deposits can ultimately generate […]