Fractional Reserve Banking 🏦 If you're…

Fractional Reserve Banking 🏦 If you're not OK with this...then opt out and opt in to #Bitcoin🫡 It's very simple #BitcoinBlok

Fractional reserve banking operates by allowing banks to lend out a portion of their deposits while retaining a fraction as reserves to meet withdrawal demands.

When a customer deposits money, the bank keeps a required percentage, known as the reserve requirement, as reserves, determined by the central bank.

For instance, with a 10% reserve requirement, a bank must retain $10 for every $100 deposited and can lend out the remaining $90.

This lending process effectively increases the money supply, as the $90 lent out can be redeposited into the banking system, further multiplied through subsequent lending rounds.

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