The idea that a bank would just custody your money (for a fee), was pretty much abolished more than a century ago. Now they even pay you because they need the reserve which brings them a potential 10x increase in phantom money, aka credit expansion etc.
Whats worse? Yes, exchanges are doing this as well... And "stable" tokens. Ponzi backed on ponzi backed on ponzi.
Yes and if you gave this idea to some one with out mentioning the word bank they would call it a ponzi scheme. Eventually every bank will fail because when a big part of their customers leaves to another bank trying to compete and offering better rates then they will not have the reserve and will fail. The government can then decide to bail them out or let them die. Both are not great for the economy and then the cycle continues with the bank which offered better rates which they cannot sustain and eventually their business fails and a lot of people get hurt again.