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False. Money on your bank account is backed by bank's assets, not by the central regulator. Recommended reading: https://en.wikipedia.org/wiki/Fractional-reserve_banking , M1 money supply, etc.

> The only way to bring stability to the bizarro world of crypto is by tying it to "fiat"

False. It's possible to make stable-coins using just price oracle and collateral. "Fiat" is not necessary. E.g. https://www.liquity.org/bold



> False. Money on your bank account is backed by bank's assets, not by the central regulator. Recommended reading: https://en.wikipedia.org/wiki/Fractional-reserve_banking , M1 money supply, etc.

You didn't even finish reading the first paragraph.

> Bank reserves are held as cash in the bank or as balances in the bank's account at the central bank

The collapse of svb shows how much the central regulator cares about making sure the entire banking system doesn't fall apart, too.

With the way you remarked "false" at the OP, though, I don't expect you're here for an engaging and educational discussion, so I'll leave it here. lol


Regarding fractional reserves...

https://www.federalreserve.gov/newsevents/pressreleases/mone...

>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.


It's possible to make stable-coins using just price oracle and collateral.

Most attempts at "algorithmic" stable coins have failed. See TerraDollar, Luna and Titan.


Over-collateralized stables are different from "algorithmic": the algorithmic ones are not fully backed by reserves.


They are very capital inefficient and still can fail during black swan events.


the algorithmic ones are not fully backed by reserves.

And you just know that the "collaterized" ones are? In most cases, their books aren't open. And they wouldn't lie about this would they?

In some strange way, the crypto brain has been programmed to ignore the obvious with a hand wave and just accept all the chicanery that is crypto.


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.




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