Discuss why it might be a good or bad idea for banks to hold 100% of their deposits? Also discuss what
role is there for banks in a future world of cryptocurrencies like bitcoins.
Banks holding 100% of the deposits would be a good idea for those wanting their
money to collect intrest in the bank along with those not wanting to spend their money
too quickly. This also creates a larger cushion for liabilities for loans or the personal use
of the bank. Holding 100% of the deposits allows for larger loans out and more money.
On the other hand, it could have an adverse effect specially if a bank is not working will
it could set off a decline in convince and safety of transactions throughout the economy.
If the bank is under stress and the value of money drop loans may become less
available and could crush sectors of the economy that depend on borrowed money.
There is a very bright future for cryptocurrencies like bitcoins there a thing called the
block chain to keep track of transactions made using the bitcoin. Bitcoin is also safer
than normal accounts dealing with regular money. To verify if the correct person is
sending the “money” and not a thief there are two keys a private and public to help
combat against theft. Another reason exchanging bitcoins or cryptocurrency is safer is
because it’s not a string of data it’s an entering on the block chain.