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But this can't be done with physical currency. If I have to make loans in physical currency, I can't magically loan out $10 the moment I receive $1. I literally
by civilized 4y ago
But this can't be done with physical currency. If I have to make loans in physical currency, I can't magically loan out $10 the moment I receive $1. I literally do not have the money to do this.
Wasn't there ever a time when banking was done with physical currency? How did it work before electronic banking?
- drexlspivey 4y agoThe bank would issue IOUs (bank notes/promisory notes etc) that were redeemable 1-to-1 to the physical currency.
- jkhdigital 4y agoIOUs i.e. paper money. Transacting in hard currency is tedious and dangerous. A trustworthy bank is an absolutely essential component of anything beyond village-scale commerce.