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In FIAT money lending is the act of money creation, rather than lending existing money held in account. I’m guessing that wouldn’t have a parallel with stableco

In FIAT money lending is the act of money creation, rather than lending existing money held in account. I’m guessing that wouldn’t have a parallel with stablecoins because the technology won’t let you just make new money at will?

topranks 1y ago
Not unless you lie about what money you have and just print them out of thin air.
worik 1y ago
> In FIAT money lending is the act of money creation That depend on how you view money. Lending does increase the volume of money in circulation, in that sense it creates money. But that view is too simple to be useful. The regulators that regulate, and in particular control reserve ratios (complex calculations that banks have to make about the relationships between their various assets) and base interest rates are the real creators of money. The side stepping of those regulators is interesting. The conventional view is that it will lead to the same sort of financial instability as existed before the gold standard was abolished and we (pretty much the entire western world) moved to modern banking and fiat currency. A hundred years of quite stable money was quite an achievement.
- nulbyte 1y ago
  > That depend on how you view money. Lending does increase the volume of money in circulation, in that sense it creates money. But that view is too simple to be useful. Far from being too simple, it is the primary method of money creation in modern economies. > The regulators that regulate, and in particular control reserve ratios (complex calculations that banks have to make about the relationships between their various assets) and base interest rates are the real creators of money. Simply setting rates does not create money. It can influence it, but it is not the ultimate cause. Lending is. Reserve banks can and do lend, but commercial banks are responsible for the majority of money creation.
  - worik 1y ago
    You are suffering frome the twin delusions of simplicity and certainty Money is fiendish complex and cannot be counted with a one dimensional model You are deceiving yourself that you understand
didroe 1y ago
The underlying feature of FIAT money creation is debt. And debt is a very natural thing (existing before money) that will just manifest in the crypto system instead.

topranks 1y ago

Not unless you lie about what money you have and just print them out of thin air.

worik 1y ago

> In FIAT money lending is the act of money creation That depend on how you view money. Lending does increase the volume of money in circulation, in that sense it creates money. But that view is too simple to be useful. The regulators that regulate, and in particular control reserve ratios (complex calculations that banks have to make about the relationships between their various assets) and base interest rates are the real creators of money. The side stepping of those regulators is interesting. The conventional view is that it will lead to the same sort of financial instability as existed before the gold standard was abolished and we (pretty much the entire western world) moved to modern banking and fiat currency. A hundred years of quite stable money was quite an achievement.

nulbyte 1y ago
> That depend on how you view money. Lending does increase the volume of money in circulation, in that sense it creates money. But that view is too simple to be useful. Far from being too simple, it is the primary method of money creation in modern economies. > The regulators that regulate, and in particular control reserve ratios (complex calculations that banks have to make about the relationships between their various assets) and base interest rates are the real creators of money. Simply setting rates does not create money. It can influence it, but it is not the ultimate cause. Lending is. Reserve banks can and do lend, but commercial banks are responsible for the majority of money creation.
- worik 1y ago
  You are suffering frome the twin delusions of simplicity and certainty Money is fiendish complex and cannot be counted with a one dimensional model You are deceiving yourself that you understand

didroe 1y ago

The underlying feature of FIAT money creation is debt. And debt is a very natural thing (existing before money) that will just manifest in the crypto system instead.