How it it different from what banks do? (Except for a central regulator.)
Your exception is the answer.
Only the central regulator can "mint" money and doing so has real world consequences. The central regulator has financial incentives to limit this sort of activity.
The bizarro world of crypto has no such regulation and as a result, it is inherently unstable.
The proof of this is right in front of you --- it is the fact that "stable coins" exist. The only way to bring stability to the bizarro world of crypto is by tying it to "fiat" --- which is the very thing crypto is supposedly working to eliminate.
It’s not an uncommon joke about how easy it would be to be a serial killer or bank robber in “the olden days” - just need to move 1 town over and you can do it all again which has a strong similarity to being able to commit crypto crimes with hardly a consequence by virtue of doing it across jurisdictions..
I sure hope we don't end up in the same place where the monetary system is only being held up by the fact that there is more debt than money creating an endless competition for the limited quantity of money that exists in order to pay off ever-increasing debts and expenses with a currency that is continually debased throughout the process.
We're already there. That's called "going to the moon". That's the end state. Get in, ride the rise, and then sell out and tell others to "buy the dip".
They are being loaned ETH to cover withdrawals and prevent what would amount to a bank run, not stablecoins. This entire comment chain is stupid and pointless.
>the Board has reduced reserve requirement ratios to zero percent effective on March 26, the beginning of the next reserve maintenance period. This action eliminates reserve requirements for thousands of depository institutions and will help to support lending to households and businesses.
I gave you Liquity as an example. They don't have "books", it's a smart contract which takes ETH as a collateral and lets ppl to borrow LUSD against it.
Maker initially worked same way, but eventually they started accepting off-chain collateral.
Your exception is the answer.
Only the central regulator can "mint" money and doing so has real world consequences. The central regulator has financial incentives to limit this sort of activity.
The bizarro world of crypto has no such regulation and as a result, it is inherently unstable.
The proof of this is right in front of you --- it is the fact that "stable coins" exist. The only way to bring stability to the bizarro world of crypto is by tying it to "fiat" --- which is the very thing crypto is supposedly working to eliminate.
Contradict and hypocrite much?