> > I don't understand why it's a bad thing to allow a 100% backed
> > currency to be used as the basis for a fractional reserve banking
> > system.
>
> Because you introduce a new risk. The unit of account of the new digital
> currency system is then no longer backed 100% by an hard asset (gold) as
> soon as you use credit instruments to increase your broad money base.
Huh??? A risk for which currency? There are two units of account
involved. Nothing has changed for the backing unit.
CCS
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