With your description I am guessing that what you call FIAT world is a financial system that is regulated where in fact banks (not exchanges, although they are

With your description I am guessing that what you call FIAT world is a financial system that is regulated where in fact banks (not exchanges, although they are also regulated in terms of what they can do with whatever is deposited and how they create revenue) are forced to hold cash to handle the risk and ensure some safety for the deposits. > If this is true, how does it get fixed? So far the only way to fix this seems to be with regulations, which seems to go against one of the main arguments in favor of these assets.