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> The customers face no risk, so the custodians start taking crazy bets because it isn't their money and so they don't really face much risk either But these w

> The customers face no risk, so the custodians start taking crazy bets because it isn't their money and so they don't really face much risk either But these weren't a shady schemes that offered unbelievable returns, just basic bank cards - No 15 year old is going to, is able to, or should be expected to audit the vendors that the 'bank' account they use for holding their allowance in uses.

roenxi 2y ago
I mean, there is an assumption in your post. That assumption is that a 15 year old should be able to give their money to some untrustworthy stranger to do who-knows-what and expect to get the money back. It is a weird double standard to me given the thread root post. I don't think people should be giving money to others thoughtlessly. If you aren't capable of understanding the consequences of your investments - as this 15 year old clearly isn't - don't invest. There is this whole financial system where we know that the people involved are sub-competent, a lot of the financial incentives that would flush incompetents out of the system have been removed, and then we expect this 15 year old to support their operations financially. To me that seems kinda silly when we put it together. This 15 years old can just put the money in a known full-reserve bank. We don't have those because responsible custodianship is uneconomic with things like the FDIC floating around, but that is a regulatory problem.
- helsinkiandrew 2y ago
  > I mean, there is an assumption in your post. That assumption is that a 15 year old should be able to give their money to some untrustworthy stranger to do who-knows-what and expect to get the money back. No I’m saying companies shouldn’t be able to look like banks without being regulated like them. This could be through a government agency, or a rating or industry organisation that guarantees orderly shutdown. If the travel industry can ensure tourists aren’t stranded abroad when travel agencies go bust why can’t fintech.

roenxi 2y ago

I mean, there is an assumption in your post. That assumption is that a 15 year old should be able to give their money to some untrustworthy stranger to do who-knows-what and expect to get the money back. It is a weird double standard to me given the thread root post. I don't think people should be giving money to others thoughtlessly. If you aren't capable of understanding the consequences of your investments - as this 15 year old clearly isn't - don't invest. There is this whole financial system where we know that the people involved are sub-competent, a lot of the financial incentives that would flush incompetents out of the system have been removed, and then we expect this 15 year old to support their operations financially. To me that seems kinda silly when we put it together. This 15 years old can just put the money in a known full-reserve bank. We don't have those because responsible custodianship is uneconomic with things like the FDIC floating around, but that is a regulatory problem.

helsinkiandrew 2y ago
> I mean, there is an assumption in your post. That assumption is that a 15 year old should be able to give their money to some untrustworthy stranger to do who-knows-what and expect to get the money back. No I’m saying companies shouldn’t be able to look like banks without being regulated like them. This could be through a government agency, or a rating or industry organisation that guarantees orderly shutdown. If the travel industry can ensure tourists aren’t stranded abroad when travel agencies go bust why can’t fintech.