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So the issuing banks print a BerkShare, sells it for $.95US to the public, and got to keep the $.95US. Hmm, anything that I missed that would dampen my enthusi
by ww520 9y ago
So the issuing banks print a BerkShare, sells it for $.95US to the public, and got to keep the $.95US. Hmm, anything that I missed that would dampen my enthusiasm to be an issuing bank?
- united893 9y agoHow is that different from what you did as a founder? Say you create a company and issue 100M shares of worthless stock. Then after some time you end up selling 1M shares at $10/each. You get to keep $10MM that you created out of thin air? Truth is, by creating the company, you created value. And the bank, by providing liquidity and reducing transactional friction does the same.
- fny 9y agoNah, you're required to exchange one for $0.95 later. Taking printing and other administrative costs into account, you definitely lose as the bank.
- s17n 9y agoThey are pegged against the dollar, meaning that the bank agrees to buy it back for what they paid for it. So basically, the issuer is taking out a zero interest loan from the users of the currency. Not a bad deal considering that the bank doesn't have to do any of the work involved in their typical source of zero-interest money (checking accounts).
- clhodapp 9y agoIsn't it the other way around? The bank is issuing a zero interest loan to the currency user? What benefit does the bank get from there being more Berkshares out in the world?
- function_seven 9y agoThe public can also sell a BerkShare to the bank for $0.95. I don’t see how the bank makes a profit from this, other than using it as a way to acquire customers. (EDIT: Or some interest on the float, I guess)
- Tinyyy 9y agoYou just described cryptocurrency.