Banking in Ancap
Is there a current consensus in the Ancap community on what banking would look like?
Fractional Reserve? Rothbardian's Full Reserve? Other?
What does D. Friedman say on this issue?
Posted Nov 10, 2020, 10:38 PM UTC
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With crypto you can be your own bank. Banking is essentially anachronistic, if you mean storing money for use.
Banking must shift to loans and other services.
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Banking has shifted, if it ever had to shift in the first place. I'm not sure that the non fractional reserve banking really existed for long at all.
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Which means banking as a concept no longer really exists. Banks essentially hold your currency for you; in the age of crypto, this makes no sense. Banks would be shifting to essentially investment firms. Everything becomes an investment. Want a new car? The crypto investment firm takes a debt position in your new car! New house? Same deal. Obviously, you get into some semantics as to what a bank vs. investment firm is, but basically, the idea that some entity exists to hold your money simply because it's not convenient for you to goes out the window. Seems pretty sweet.
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There would likely be competition in currency, with a wide variety of notes and cryptocurrencies available, all of which are worth more or less depending on their desirability and a swath of market factors. Among these, some will be very popular due to the means by which they are minted and features they include.
We already see this in cryptocurrency, more or less. People carry a wide variety of cryptocurrencies, and they use whichever one makes sense at the time. There are tools to allow selling and buying of different currencies, and this process is getting quicker. It'll likely be the case that you could pay with whichever cryptocurrency you want, as the app will be to the point where it can do the conversion to whichever cryptocurrency the seller accepts at the market rate fairly rapidly.
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[removed]
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crytocurrency is the only option since everything else can just be taken by force without even having to extract information from people.
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Whatever the market decides
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What type of banking do you like? Odds are that will be an option. You can pay small fees to hold your currency, or you can choose FRB with the explicit risk that the money isn’t there when you need it. In between will also exist: smaller fees with 80%+ reserve rates.
Of course, with higher interest rates (no longer suppressed), you’ll see savings and deposit accounts separate. Savings accounts will be an investment, and won’t be available for redemption on demand.
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Free banking. Most modern libertarians reject Rothbards claim that FRB amounted to fraud.
I personally think that under free banking, society would gravitate to a hard currency.
See Selgin & White for modern work on the subject.
https://www.alt-m.org/