10 ms·

Is it similar to WildCat banking?

• andy81 3mo ago
  More than similar. Another word for the same thing.
  • l23k4 3mo ago
    I'd argue that the poor capitalization was a core part of wildcat banking, that's not really the case here.
    • nytesky 3mo ago
      Is that a tongue in cheek reference to my inadvertently weird capitalization of wildcat as WildCat — no idea why I did that, maybe a throwback to my ThunderCats fandom of my youth. Maybe lack of capital is a factor, but doesn’t that only come into play if redemptions are large? If it acts as a currency in circulation, there can be very little actual capital backing it (like how fractional reserves work for regular banks, IIRC).
      • l23k4 3mo ago
        >Is that a tongue in cheek reference to my inadvertently weird capitalization of wildcat as WildCat — no idea why I did that, maybe a throwback to my ThunderCats fandom of my youth. No, but that's hilarious. Good catch! I don't think "wildcat banking" would be known as that if the banks hadn't been poorly capitalized (as in, they didn't have the money). If the banks had actually worked out, we'd just be calling it "banking". Today, stablecoins have a hilariously simple way to print money: just buy treasuries, money market funds, or whatever. We're not necessarily going to see them collapsing due to poor capitalization.