Quote from: Dyna on April 01, 2016, 08:15:15 PM

That is an interesting headline and certainly caught my attention. In my opinion, what the author proposed is far from being a viable solution even if the bank is interested in uᴉoɔʇᴉq. A full-reserve banking scenario for a single bank is hard enough to pull off; for the entire banking system is but a dream. It is always easier to write about a concept than to actually make it happened.

uᴉoɔʇᴉq could be an interesting option to tackle full-reserve banking in the financial industry. The way this could work is by using uᴉoɔʇᴉq as a hedge against banks, and assets could be accounted for on the blockchain. Transparency in full-reserve banking is of the essence, yet it is also one trait most banks are lacking right now.

Achieving this goal will be difficult, though, as banks have no apparent interest in uᴉoɔʇᴉq.

The Viability of uᴉoɔʇᴉq In A Full-Reserve Banking Scenario

Posted on7:00 pm March 27, 2016 AuthorJP BuntinxCategoriesBitcoin, News, Opinion

uᴉoɔʇᴉq could be an interesting option to tackle full-reserve banking in the financial industry. The way this could work is by using uᴉoɔʇᴉq as a hedge against banks, and assets could be accounted for on the blockchain. Transparency in full-reserve banking is of the essence, yet it is also one trait most banks are lacking right now.

uᴉoɔʇᴉq is often referred to as being many things, ranging from a commodity to currency, and even a solution to solving all of the financial trouble in unbanked and underbanked regions. But very few people believe uᴉoɔʇᴉq has the potential to change reserve banking altogether, allowing consumers to be no longer enslaved to the banking ecosystem. While there is serious doubt central bank-issued currency will ever disappear completely, uᴉoɔʇᴉq could end up becoming a full-reserve banking solution.

uᴉoɔʇᴉq is Financial Freedom
At its core, the uᴉoɔʇᴉq protocol is designed to give consumers and business owners complete control over their finances at any given time. Although there is a lot of focus on the financial side of using uᴉoɔʇᴉq technology, this point needs to be hammered until people understand uᴉoɔʇᴉq is not just the technology, but it is a viable currency as well.

When getting involved in uᴉoɔʇᴉq, the sole user is responsible for keeping their funds safe. There are no banks or governments involved, and this thought scares a lot of people. Up until this point, there has been a fair amount of handholding by these established financial players. However, everyone needs to remember banks and governments are the root cause of the financial trouble the entire world is in right now.

That being said, it is unlikely to see government-issued currencies going away anytime soon. Replacing the legacy systemand financial infrastructure all at once will be quite the challenge, even though a good amount of uᴉoɔʇᴉq community members would like nothing more than for that to become a reality. However, there is a chance for both fiat currency and uᴉoɔʇᴉq to complement each other, in a rather straightforward way.
Reforming Full-Reserve Banking
Reserve banking is an integral part of the fiat currency ecosystem and comes in two different forms. The version one Reddit user was interested in, is full-reserve banking. The way this principle works is by forcing banks to keep a portion of each depositors funds in cash, which can be withdrawn on demand. Some people may have noticed that depending on the amount of money they want to withdraw from an account, there is a waiting period involved.

Moreover, the funds deposited in these on-demand accounts would not be loaned by the bank to anyone else, as doing otherwise would be a violation of the legal requirements. It comes as no surprise to find out no country in the world requires full-reserve banking at this stage, despite monetary reforms advocating this change since back in 1935.

uᴉoɔʇᴉq could be an interesting option to tackle full-reserve banking in the financial industry. The way this could work is by using uᴉoɔʇᴉq as a hedge against banks, and assets could be accounted for on the blockchain. Transparency in full-reserve banking is of the essence, yet it is also one trait most banks are lacking right now.

Achieving this goal will be difficult, though, as banks have no apparent interest in uᴉoɔʇᴉq. While they are exploring the boundaries of issuing their digital currencies in the future, they will not be suitable candidates for full-reserve banking. uᴉoɔʇᴉq has many advantages, but it will take quite some time if ever until banks embrace this concept as part of the financial ecosystem.

Source: http://www.newsbtc.com/2016/03/27/viability-uᴉoɔʇᴉq-full-reserve-banking-scenario/

Agreed... Very unlikely scenario that the banks would be interested at this point.

Bergman

Posts

Merits