Bank of America Criticizes Proof of Reserves While Banks Need No Reserves. Anybody Smell Fear?
2 min read
BoA put of a statement criticizing proof of reserves saying it has many shortcomings. I’m not even saying PoR is perfect, but it is a hell of a lot better than nothing, and we also are pushing toward proof of liabilities which Kraken, Gate io and Coinbase have already published proof of reserves with liabilities.
This is meanwhile funds is the bank require absolutely NO reserves. I’m not kidding.
So basically, banks can print infinite amounts of money with no repercussions. As a matter of fact, since COVID, authorities have been actively encouraging bank lending. They cooled their statements on that now that we see the effects on inflation and how terrible easy money was. Imagine if there was doubt in the market and a run of any of these banks. It would be 2008 all over again and probably worse.
I understand the statement by BoA to be out of fear. If CEXes can prove through math and not any weak flimsy word-of-mouth promises that all funds are backed and there is no debt through higher amounts of liability what would stop people from using crypto, besides only being able to understand it. All the financial freedom with limited responsibility as they could mostly trust CEXes to handle all the security and ease-of-use features.
All that would be left is to fix Defi hacks. But trustless but trustworthy(through math) Cefi would more than fill in until then and it sounds like a nightmare for banks. Crypto is growing and banks are feeling the pinch.
submitted by /u/OneThatNoseOne
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