The Bitcoin Blok on Nostr: Fractional Reserve Banking 🏦 If you're not OK with this...then opt out and opt in ...
Fractional Reserve Banking 🏦 If you're not OK with this...then opt out and opt in to #Bitcoin🫡 It's very simple #BitcoinBlok
Fractional reserve banking operates by allowing banks to lend out a portion of their deposits while retaining a fraction as reserves to meet withdrawal demands.
When a customer deposits money, the bank keeps a required percentage, known as the reserve requirement, as reserves, determined by the central bank.
For instance, with a 10% reserve requirement, a bank must retain $10 for every $100 deposited and can lend out the remaining $90.
This lending process effectively increases the money supply, as the $90 lent out can be redeposited into the banking system, further multiplied through subsequent lending rounds.
#Bitcoin #fractionalreservebanking #Banking #Money #assets #BeOG #Plebchain
Fractional reserve banking operates by allowing banks to lend out a portion of their deposits while retaining a fraction as reserves to meet withdrawal demands.
When a customer deposits money, the bank keeps a required percentage, known as the reserve requirement, as reserves, determined by the central bank.
For instance, with a 10% reserve requirement, a bank must retain $10 for every $100 deposited and can lend out the remaining $90.
This lending process effectively increases the money supply, as the $90 lent out can be redeposited into the banking system, further multiplied through subsequent lending rounds.
#Bitcoin #fractionalreservebanking #Banking #Money #assets #BeOG #Plebchain