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>their contents is magic'd out of nowhere through fractional reserve banking Could you ELI5 what is the connection between fractional reserve banking and creat

>their contents is magic'd out of nowhere through fractional reserve banking Could you ELI5 what is the connection between fractional reserve banking and creating money? Does the following mean that all banks can create infinity money out of zero deposits? "As announced on March 15, 2020, the Board reduced reserve requirement ratios to zero percent effective March 26, 2020. This action eliminated reserve requirements for all depository institutions." https://www.federalreserve.gov/monetarypolicy/reservereq.htm https://www.federalreserve.gov/monetarypolicy/reservereq.htm Also, a direct to consumer crypto dollar sounds exactly like giving individuals accounts at the Fed, the same type of account banks currently have. Except more crypto-ey. Why, if the Fed has refused to let people bank with it directly, would they change their mind? Someone actually thought recently of opening a bank that would literally stash all deposits at the Fed, and the Fed didn't like that, presumably because they feel it would undermine the regular banks.

landemva 5y ago
Accounts at the Fed will not be a crypto like bitcoin, etc. It will be a one party ledger fully controlled by the Fed. One mistake or court order and you are cancelled and done.
- perl4ever 5y ago
  I agree that it will be controlled by them, whether or not it uses cryptographic algorithms. But also, I'm saying in either case, it amounts to the account that each bank is required to have at the Fed, and the Fed apparently has refused in the past to go down the road of bypassing existing banks by opening this up to other entities or people. You can view that cynically as regulatory capture, as a sinister banking cabal controlling everything, or as a prudently conservative outlook if you think the banking system serves a purpose, or might serve a purpose a la Chesterton's fence. But no matter what the motivation, the question I have is why would they want to change their minds now?
  - landemva 5y ago
    While it can be studied now, I suspect Congress will need the 1913 enabling law (which gave authority to private contracting company known as 'federal reserve') authority to directly hold consumer funds. It's not necessary as it can be done with existing consumer banking. Their idea is to remove bearer money - cash and coin. And then make barter more cumbersome.

landemva 5y ago

Accounts at the Fed will not be a crypto like bitcoin, etc. It will be a one party ledger fully controlled by the Fed. One mistake or court order and you are cancelled and done.

perl4ever 5y ago
I agree that it will be controlled by them, whether or not it uses cryptographic algorithms. But also, I'm saying in either case, it amounts to the account that each bank is required to have at the Fed, and the Fed apparently has refused in the past to go down the road of bypassing existing banks by opening this up to other entities or people. You can view that cynically as regulatory capture, as a sinister banking cabal controlling everything, or as a prudently conservative outlook if you think the banking system serves a purpose, or might serve a purpose a la Chesterton's fence. But no matter what the motivation, the question I have is why would they want to change their minds now?
- landemva 5y ago
  While it can be studied now, I suspect Congress will need the 1913 enabling law (which gave authority to private contracting company known as 'federal reserve') authority to directly hold consumer funds. It's not necessary as it can be done with existing consumer banking. Their idea is to remove bearer money - cash and coin. And then make barter more cumbersome.