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If I don't need a physical safe to hold my money anymore, then obviously banks will be forced to go digital as well right? I'm no expert, but I don't think tha
by zizee 14y ago
If I don't need a physical safe to hold my money anymore, then obviously banks will be forced to go digital as well right?
I'm no expert, but I don't think that most banks would actually hold paper notes for every dollar they are storing for their account holders. In reality banks are already pretty much digital for most transactions.
What I am wondering is when* various governments are going to start enforcing existing regulations^, that apply to banks, on the various bitcoin exchanges.
* perhaps the exchanges already comply with these regulations, but I would be surprised.
^ don't ask me what the regulations are, I am guessing that banking is/should be a heavily regulated industry in most countries.
edit: formatting.
- mvleming 14y agoOh no not at all, you're right. I'm not sure if this is the correct terminology but, googling it, I think it's called reserve requirement. "The reserve requirement sets the minimum reserves each bank must hold to demand deposits and banknotes." [1] An example they give is Hong Kong whose banks must hold 25% of their liabilities. During the subprime mortgage, American banks (and some foreign banks but I can't recall them) were deregulated in a way that allowed them to have a higher ratio between their liabilities and what they actually held. This meant they could increase their financial investments without really having the money. I can't remember the exact ratio but it was something like 40-1. [1] http://en.wikipedia.org/wiki/Bank_regulation#Reserve_requirement http://en.wikipedia.org/wiki/Bank_regulation#Reserve_require...