>I am not sure there is a clear distinction between the two for fractional reserve banking ? If your assets are real and not shitcoins, there is a difference.

>I am not sure there is a clear distinction between the two for fractional reserve banking ? If your assets are real and not shitcoins, there is a difference. If I have $200 in my bank, the bank takes $100 from me and buys AAPL stock (and adds their own cash); and then I go to withdraw my $200 on Saturday: 1. The bank is illiquid. I want $200 cash, but the bank only has $100 and 1 AAPL stock. 2. The bank is (likely) solvent. Unless AAPL crashes below $100 on Monday morning they are likely good for the money (AAPL, a blue chip stock, is unlikely to crash below $100) on monday morning. In this case a lender of last resort will step in (like the Fed) and bank may pay some premium for an emergency loan.