The Dynamics of Digital Payments and Banking Stability

This chapter examines the vital relationship between digital payments and the overall stability of the financial system, stressing the potential collapse in the absence of effective banking mechanisms. It discusses the complexities of fractional reserve banking, exploring how it can function without socializing losses while highlighting the moral hazards created by central banking interventions. The chapter further investigates the implications of inflation on personal finance and societal productivity, drawing parallels between individual risk management and the banking system's reliance on central bank support.