For BitCoin it makes no sense to have a few entities generating credit out of thin air, when BitCoins can be directly generated out of thin air by individuals (well, it's indirectly from electricity). However, such entities would start popping up and create credit if the BitCoin supply remains limited.
I mean, then people could just use Ripple and be done with the whole concept of medium of exchange.
I am not sure about what you mean. It's impossible to have a central credit or central bank in the bitcoin economy, unless we're talking about a very good bank that crushed the competition.
It is virtually impossible to have a
central bank in BitCoin, but it is possible to have credit creationists (when the amount of money in circulation is fixed and the economy is growing; why? because there is demand for stuff which acts as money / medium of exchange), and while there would be competition, they would be significantly fewer (that is, concentrating more power over the BitCoin economy) than the total number of BitCoin peers.
Why let those few increase the money supply through credit (and thusly concentrate the power to increase the money supply), when everybody can do the same from their own BitCoin application?