3 ms·

I'm lost, how is the government insurance of deposit records any worse than the government insurance of cash?

• andrewla 5y ago
  It's worse, not on a "debasement of the currency" basis, but on a surveillance and censorship basis. On a systemic basis it is slightly more dangerous than cash just because it reinforces the notion that bank deposits are valued at their face value and are thus a cash equivalent. But banks can fail or become insolvent, and because the money sovereign has decided that bank deposits are equivalent to cash, it is obligated to maintain that (through bailouts or other support), while at the same time banks are for-profit enterprises that are taking non-negligible risks (and sometimes explosively tail-heavy risks) to earn income based on their deposits.