Quote:
Originally Posted by AdultKing
Paypal is a "middle man" as you put it, it stores fractional reserves of account holder US Dollar balances in various banks, at the moment these include:
(Source Paypal web site - disclosure statements)
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Link to it. Also, Paypal could be run under banking laws. I am way too lazy to go look but if so they are doing something within the law by being setup correctly.
You use this idea that an 'unregulated' epassporte must be doing the same thing. Being unregulated (in USA) is what makes it to where you CAN'T use fractional reserve. You must keep your customers money at all times.
I'm working, so I'm not going to dig through legalese to figure out the exact rules. Here is an example however.
Unlike fractional-reserve banking, DGCs hold 100% of clients' funds in reserve as gold, silver, and/or platinum, which can be exchanged via digital certificates. Proponents of DGC systems say that deposits are protected against inflation, devaluation and other economic risks inherent in fiat currencies. These risks include the monetary policy of countries or territories, which are said by proponents to be harmful to the value of paper currency.
http://en.wikipedia.org/wiki/Digital_gold_currency
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