One cannot make Bitcoins out of thin air and the BTC is converted to USD before it is loaded onto the debit card. How could you create a fractional-reserve system with that? Please explain what you mean.
I'm talking about Bitcoincard. With unaccessible proprietary software inside the chip.
AFIAK the BTC i converted to USD and then loaded onto the card. Then the card holder can spend it anywhere like using a normal debit card.
If the card magically starts creating money after loading my BTC on it, I sure as hell want one. But that would screw the card issuer or BitInstant, not me.