Will fractional reserve banks emerge in a cryptocurrency economy?

If fractional reserve banks are likely to arise in a cryptocurrency economy, that could have a variety of important implications for the operation of the financial system.

What is fractional?

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Would a cryptocurrency-based financial system eliminate the need for banks?

Many in the crypto community take the view that a cryptocurrency-based financial system would eliminate the need for banks, especially those that keep reserves equal to only a fraction of their deposits.

What is a cryptocurrency and how does it work?

Cryptocurrencies are digital assets that rely on an encrypted network to execute, verify, and record transactions, independent of a centralized authority such as a government or bank. Cryptocurrency was developed as an alternative to the dollar, and its functions can make it an attractive investment.