Community-based Banking (15) Banking System

Under the threat of competition from sound community-based banks, the existing commercial banks might be forced to change their way of operating. They would have to shift from holding assets and liabilities to keeping records of debts and payments. Their system already has an electronic system for recording transactions. They just need to get the deposits off their balance sheets.

These banks would begin operating like a share registry. The operator of the registry does not record the shares as assets or liabilities on their balance sheet. They simply record changes of ownership of shares.

In the same way, a warehouse owner keeps a list of things stored and who owns them. This will change over time. In some cases, the things stored will be the same, but the owner will change. A key role of a warehouse operator is to keep reliable records. This is the best model for banking. If customers demand this type of banking service, all banks would have to provide it.

On the other hand, if the reliability of Christian record-keepers is accepted throughout their society, other currencies will gradually be squeezed out and the world system will gradually become redundant. Transactions with the world system would become less frequent.

This full series is at Community Banks