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> Since not everyone needs their btc often since they're hodling all the time, the bank could probably lend out more bank_coins than they have bitcoin to help o

> Since not everyone needs their btc often since they're hodling all the time, the bank could probably lend out more bank_coins than they have bitcoin to help others get access to more assets and get a return on the loans. I know you're trying to be cute, but the SPDI charter that Kraken Bank has prohibits fractional reserves. Kraken must hold your deposit.

joemazerino 5y ago
For now ;D
spywaregorilla 5y ago
I tried looking that up and found this: https://bpi.com/beware-the-kraken/#_ftn1 https://bpi.com/beware-the-kraken/#_ftn1 > If Kraken Financial had been in full operation in March 2020, it may not only have ended up insolvent by mid-March but would likely have been subject to a bank run. In practice, it has more in common with a prime money market fund than a bank. Sounds about right
- Seattle3503 5y ago
  BPI isn't an impartial source of information. They are essentially a think tank / lobby group for incumbent banks. See their about page: https://bpi.com/about-us https://bpi.com/about-us
  - spywaregorilla 5y ago
    Maybe? Their thesis seems pretty straightforward though. Kraken deposits are uninsured. Kraken intends to invest your deposits in fixed income assets, which are vulnerable to capital losses if interest rates rise, among other things (e.g. corporate bonds). If these investments go negative, Kraken will have less than 100% reserves and there's no insurance to help customers, so the rational thing to do is withdraw all assets before others do.
    - Seattle3503 5y ago
      > Kraken intends to invest your deposits in fixed income assets They don't source this claim at all, they just assert it and expect you to follow along. It's always easy to craft a just-so-story that sounds reasonable. We could find theories all over the internet about why existing banks today should collapse any minute. What matters is the expertise and credibility of the source.
      - spywaregorilla 5y ago
        Fixed income assets are just about the only thing they're allowed to invest in. If they leave it in cash they won't be profitable.

joemazerino 5y ago

For now ;D

spywaregorilla 5y ago

I tried looking that up and found this: https://bpi.com/beware-the-kraken/#_ftn1 https://bpi.com/beware-the-kraken/#_ftn1 > If Kraken Financial had been in full operation in March 2020, it may not only have ended up insolvent by mid-March but would likely have been subject to a bank run. In practice, it has more in common with a prime money market fund than a bank. Sounds about right

Seattle3503 5y ago
BPI isn't an impartial source of information. They are essentially a think tank / lobby group for incumbent banks. See their about page: https://bpi.com/about-us https://bpi.com/about-us
- spywaregorilla 5y ago
  Maybe? Their thesis seems pretty straightforward though. Kraken deposits are uninsured. Kraken intends to invest your deposits in fixed income assets, which are vulnerable to capital losses if interest rates rise, among other things (e.g. corporate bonds). If these investments go negative, Kraken will have less than 100% reserves and there's no insurance to help customers, so the rational thing to do is withdraw all assets before others do.
  - Seattle3503 5y ago
    > Kraken intends to invest your deposits in fixed income assets They don't source this claim at all, they just assert it and expect you to follow along. It's always easy to craft a just-so-story that sounds reasonable. We could find theories all over the internet about why existing banks today should collapse any minute. What matters is the expertise and credibility of the source.
    - spywaregorilla 5y ago
      Fixed income assets are just about the only thing they're allowed to invest in. If they leave it in cash they won't be profitable.