Interest rates will mostly disappear under a bitcoin standard. The world will switch from a debt based fiat system to an equity based hard money system.
Debt doesn’t work “at scale” because interest requires new money to be created.
Also, most people won’t lend their bitcoin for a fixed payment and risk the borrower’s bankruptcy.
The only reason to invest your bitcoin will be to own other hard assets or a share of a bitcoin business.
Yes, lending bitcoin will be disincentivized because since there's no supply of new bitcoin, eventual defaults are mathematically assured.
Instead of lending rates, perhaps there will be fluctuating rates of equity-for-capital. That is, the purchasing power of bitcoin will increase with greater general productivity growth, and will decrease with lower productivity growth. As a bitcoin holder, if general productivity growth is slow or negative, you'd be incentivized to accept less equity in a business per unit of bitcoin buy-in. If productivity is growing quickly, you'd demand more business equity in exchange for your fast-deflating bitcoin capital.
Makes intuitive sense: if there isn't much innovation or population growth happening, then it will become cheaper to get capital in exchange for equity. A naturally competitive dynamic.
Borrowing for consumption though? I would think that would be impossible.
