BNK. Everyone is a Bank
... How can the citizen (CTZ), empowered with Instant Transfer (INS) and the public ledger (PLG) participate in issuing currency? How can the concept of limited risk (LMR) still provide for funding of capital ventures?
Bank bubbles and crashes have wrecked massive suffering on humans over the last hundreds of years. Can we do away with this institution?
Bankers take our money, risk it, and reap the profits. They are stealing our output and lining their pockets with it. We should do away with the current banking institution. The amount of human capital and productivity that is lost trying to gain a small advantage while moving money around will be looked back on in the future with disdain and horror. They are stealing from all of us.
The fractional reserve banking system does have some features that we would like to borrow, but we propose that the dividends of these advantages go to the citizens and not to the bankers.
We propose another lever available to the issuer of currency. This is the reserve requirement for lending of our money. All accounts will be able to have a portion of their cash 'protected' from demurrage. This portion will go into a pool of cash that will be made available for loans. This pool will be multiplied by another lever, called the 'Issuance Rate' which will allow the issuer to increase the money supply.
For example. Say a citizen has $100. The reserve rate is 90%. The issuance rate is 20%. The citizen will have 10% of his funds automatically moved into his 'bank' partition, and it will be protected from demurrage. In addition, the loan pool will now have $12 available for loan.
What will the interest rate and terms of these loans be? We expect rates to trend toward zero for short term loans. If Silvio Gesell's theory of demurrage is correct, the charging of interest for loans should be unnecessary.
If money is 'free' won't there be a run on the bank for it? Won't the market bid up the cost of this money so that interest is required?
We propose that 'Bankers' bid cash for the right to distribute the issued money. Why would they bid cash if they won't receive interest? Because they will get prefs in the account they direct the money to. In this way, bankers only make money when the economic piston is firing and new capital is being generated.
Because we have instant transfer, and the cash system is centralized, we do not need to worry about 'bank runs.' Cash going out of one account will go into another. The reserve rate will allow the amount available for lending to remain in proportion to the reserve and issuance requirements.
Issuers should use the levers of demurrage, reserve rate, and issuance rate to keep inflation flat.
Through this system, citizens and legal entities will earn a return on their borrowed out funds equal to the demurrage rate. They will have professionals managing the loaning out of the cash.
Therefore:
Remove the commercial banking system and replace it with citizens automatically funding the issuance of loans from a general pool.