Another response to crisis has been to give even more power and responsibility to a centralized authority. Switzerland's "sovereign money" referendum fits into this category. On Sunday (June 10), Swiss voters will decide whether to ditch the fractional-reserve banking system (pdf), in which banks create money as a byproduct of extending credit, lending out far more than they hold in deposits. The radical reform, called Vollgeld, would give the Swiss National Bank a monopoly over this power, and require commercial banks to lend only what they have on hand.


It feels less revolutionary--maybe because I write so many bitcoin stories--but it's arguable that centralization has been a bigger force following the financial crash than a push towards the stateless, decentralized power promoted by the crypto crowd. There are fewer banks than before, and they're bigger and more profitable. Ordinary fiat bank deposits are growing. The US and Europe enacted sweeping regulatory overhauls that gave regulators more heft. The Swiss initiative, in fact, would give officials power that they don't even want.

The original title of this article calls the concept "the anti-bitcoin" -- but that's ridiculous, since any lending based on cryptocurrencies is also (by default) 100%-reserved.

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