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No, they are more prone to runs because there is no central bank to bail anyone out
You literally cannot have a bank run on USDC or BTC because they do not do fractional banking (i.e loan out the money you deposited).
Most people are well under the insurance limit and would rather bank for free than pay fees.
Most people are well under the insurance limit and would rather bank for free than pay fees.
This. The fees to cover the bank branches, the online banking system, atm usage etc. would have to be huge.
Also, if nothing else, crypto has shown that storing money performing transfers is not that expensive.
No, they are more prone to runs because there is no central bank to bail anyone out
Uhm, hate to break it to you, but you can only have a run on the bank as a result of fractional banking - which is systemic in the fiat banking system due to regulations only requiring they hold 10% of customers' deposits. You literally cannot have a bank run on USDC or BTC because they do not do fractional banking (i.e loan out the money you deposited).
Most people are well under the insurance limit and would rather bank for free than pay fees.
I'd argue that most people simply don't know what is going on and think that their money is being stored in a bank vault.
No, they are more prone to runs because there is no central bank to bail anyone out
Uhm, hate to break it to you, but you can only have a run on the bank as a result of fractional banking - which is systemic in the fiat banking system due to regulations only requiring they hold 10% of customers' deposits. You literally cannot have a bank run on USDC or BTC because they do not do fractional banking (i.e loan out the money you deposited).
No, they are more prone to runs because there is no central bank to bail anyone out
Uhm, hate to break it to you, but you can only have a run on the bank as a result of fractional banking - which is systemic in the fiat banking system due to regulations only requiring they hold 10% of customers' deposits. You literally cannot have a bank run on USDC or BTC because they do not do fractional banking (i.e loan out the money you deposited).
You don’t own a USDC. Instead some random offshore company owes you a dollar.
It pains me that even on hacker news (a more sophisticated discussion destination than most) most people who are replying didn't read the body of the message and just saw "are there banks/crypto cos immune to bank run" and just blurted out their usual response "no central bank to bail anyone out" or "banks earn money by investing / crypto has no FDIC". OP is explicitly asking what if banks (tradfi) or crypto cos held…
The point being running to crypto because you are scared of a bank run is probably not going to be in your risk profile
Earlier quoted context omitted.
Uhm, hate to break it to you, but you can only have a run on the bank as a result of fractional banking - which is systemic in the fiat banking system due to regulations only requiring they hold 10% of customers' deposits. You literally cannot have a bank run on USDC or BTC because they do not do fractional banking (i.e loan out the money you deposited).
With stable coins you can have insolvency which is worse than a bank run probably (because no government insurance). Stable coins are the worse to keep cash - higher risk than a bank account but no interest. The only logical uses for them is online gambling and money laundering. You don’t own a USDC. Instead some random offshore company owes you a dollar.