The creators of cryptocurrencies have often positioned themselves as the advocates of individuals versus the large banks. They have championed peer-to-peer money transfers which results in financial disintermediation (that is cutting out the banks). It is also a way to avoid government oversight (positive side - more individual liberty; negative side - tax avoidance and money laundering) In addition, since cryptocurrencies have fixed amounts of currency (most notably Bitcoin), there would be no inflationary effect of central banks pumping money into the economy. So is there a way to integrate cryptocurrencies into a fractional reserve banking system? Read the following artic 1) Would integrating cryptocurrencies into the banking system undermine the essential goal of peer-to-peer transactions? 2) If you do have fractional reserve banking for cryptocurrencies, what entity should provide oversight - the Federal Reserve or some sort of multinational body since cryptocurrency banks wouldn't need to have a physical location? 3) Would you deposit your money into a cryptocurrency bank?
The creators of cryptocurrencies have often positioned themselves as the advocates of individuals versus the large banks. They have championed peer-to-peer money transfers which results in financial disintermediation (that is cutting out the banks). It is also a way to avoid government oversight (positive side - more individual liberty; negative side - tax avoidance and money laundering) In addition, since cryptocurrencies have fixed amounts of currency (most notably Bitcoin), there would be no inflationary effect of central banks pumping money into the economy. So is there a way to integrate cryptocurrencies into a fractional reserve banking system? Read the following artic 1) Would integrating cryptocurrencies into the banking system undermine the essential goal of peer-to-peer transactions? 2) If you do have fractional reserve banking for cryptocurrencies, what entity should provide oversight - the Federal Reserve or some sort of multinational body since cryptocurrency banks wouldn't need to have a physical location? 3) Would you deposit your money into a cryptocurrency bank?
Chapter18: Money And The Federal Reserve System
Section: Chapter Questions
Problem 5SQ
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