Fractional reserve lending does not work with #Bitcoin. Today when a bank issues a loan it creates the money as it can lend out more then they have in reserve. Can’t do that with #BTC. I guess you could lend out Bitcoin with interest and then at the end of the load get the principal and the interest as profit. But banks would rather show BTC as reserves and not just the fiat they have.

At the moment I see a hybrid system possible, BTC and fiat, inside the banking system. What do you think?