Fractional reserve banking has extensive networks of credit background checks, agents for repossession of goods, government mandated subsidies for home and student loans. Et cetera. It has had decades to develop entire industries, regulation and laws which revolve around and support its native loan markets.

Bitcoin and cryptocurrencies in the present day, lack that support infrastructure. Which makes it very difficult, if not impossible, for a crypto based asset to do basic background or credit checks to know what rates or risk factors should accompany potential loan candidates. These are known issues cryptocurrencies have struggled with for many years. Without good solutions being found.

In past years, small crypto start ups tried to use ID based certification as a format for legitimizing loans. But I think most know by now there are websites and entire industries on the internet which are devoted towards making and selling fake IDs for "entertainment or humor purposes" only.

Banks and fractional reserve based industries have access to financial networks and credit scores, along with methods of legally forcing loan dodgers to eventually pay up. Crypto assets have always lacked that support infrastructure which has always prevented it from penetrating home, auto, personal and business loan markets. All of which are dominated by fractional reserve institutions.