Fractional Reserve Banking - What is it??

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1 year ago

If you're new to cryptocurrency, you may occasionally hear the term "fractional reserve banking" used negatively. Even if you don't understand what fractional reserve baking is, the ominous tone of the podcaster's voice clearly lets you know that crypto is the answer and solution to the dreaded fractional reserve banking. But why is fractional reserve banking so bad? How did fractional reserve baking start, and are there any benefits of fractional reserve baking? Lastly, what makes cryptocurrency lending and DeFi different from fractional reserve baking? That's the subject of today's video. #defi #crypto #banking

References

https://www.investopedia.com/terms/f/fractionalreservebanking.asp#:~:text=under%20its%20charge.-,Fractional%20Reserve%20Multiplier%20Effect,or%2010%25%2C%20in%20reserve.

https://www.federalreserve.gov/monetarypolicy/reservereq.htm

https://ethplorer.io/

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