Technology
Which posts fit here?
Anything that is at least tangentially connected to the technology, social media platforms, informational technologies and tech policy.
Rules
1. English only
Title and associated content has to be in English.
2. Use original link
Post URL should be the original link to the article (even if paywalled) and archived copies left in the body. It allows avoiding duplicate posts when cross-posting.
3. Respectful communication
All communication has to be respectful of differing opinions, viewpoints, and experiences.
4. Inclusivity
Everyone is welcome here regardless of age, body size, visible or invisible disability, ethnicity, sex characteristics, gender identity and expression, education, socio-economic status, nationality, personal appearance, race, caste, color, religion, or sexual identity and orientation.
5. Ad hominem attacks
Any kind of personal attacks are expressly forbidden. If you can't argue your position without attacking a person's character, you already lost the argument.
6. Off-topic tangents
Stay on topic. Keep it relevant.
7. Instance rules may apply
If something is not covered by community rules, but are against lemmy.zip instance rules, they will be enforced.
Companion communities
!globalnews@lemmy.zip
!interestingshare@lemmy.zip
Icon attribution | Banner attribution
view the rest of the comments
“…approach to banks and crypto.
Specifically, the resolution targeted the SEC’s Staff Accounting Bulletin 121, which presents guidance around how banks can handle customers’ crypto assets — in effect, they must treat those assets as liabilities. Banking groups have criticized this approach as making it prohibitively expensive for them to handle crypto, while regulators argue it’s necessary to protect investors, particularly after the collapse of high-profile crypto companies like FTX.”
A checking account is a liability to a bank because it must be prepared to pay out the balance if the account holder decides to withdraw. Forcing banks to treat crypto holdings as liabilities makes the bank hold more in reserves in order to be better prepared for a bank run.
This sounds good to me. To my understanding, banks in the US do not actually have to hold any money in reserve for it's customers as of... 2020?
Hey I found the FED posting! https://www.federalreserve.gov/monetarypolicy/reservereq.htm
This is my favorite part "As announced on March 15, 2020, the Board reduced reserve requirement ratios to zero percent effective March 26, 2020. This action eliminated reserve requirements for all depository institutions."
Happy Halloween kids. 😈
Yeah that's correct. It's pretty wild that things work this way. Most people think that we still have fractional reserve banking, which is where the bank has $1 in reserve and they lend it to many borrowers simultaneously. With no reserve requirement they can essentially loan money that doesn't exist. Banks want to avoid succumbing to a bank run where too many clients make withdrawals at the same time. But essentially they operate like a retail business that determines how many products to keep on hand in order to meet demand on any given day. Bank loans create both a credit (to the borrowers account) and a debit in the bank's main ledger, the debit is a liability as we discussed, the bank must be prepared to pay.
Banks are limited by their ability to find qualified borrowers who will repay their loans.
Meh. If you're investing in crypto then you're accepting the risks.
If I underatand correctly, you're saying banks should be allowed to accept the risk of crypto market fluctuations and scams.
Unfortunately when banks lose bets, they effectivel hold the economy hostage until taxpayers bail them out.
Much better to tell them if they want to offer crypto holdings, they need to be able to cover total loss of it.
If that means banks can't hold crypto, I won't shed a tear.
No. I was referring to end users. But yes, I'd rather banks be barred from doing anything with it too if it means we're never responsible for bailing them out.
We're agreeing. I think i just worded it poorly.