Yes you’re right, “fractional banking” may have been a bad choice of words on my part. The point I was trying to get across was that assets given to a crypto ex

Yes you’re right, “fractional banking” may have been a bad choice of words on my part. The point I was trying to get across was that assets given to a crypto exchange would be lent out and used, instead of custodied. This is the same as a bank. When you give them money they lend it out and use it for other purposes which is why “bank runs” exist if everyone asks for their money back at the same time In fact the US regulators have been very hostile in recent years to banks where you give them money and they just custody it for you safely, even for a fee