When you write a check, you are telling your bank, "Hey, bank, send money to here". If you have the money, and "here" exists, they send the money.
The bank doesn't have the liberty to say "We don't think you should be sending money to there". The federal courts and the treasury can, but that's a high hurdle and basically means "there" is under investigation for crimes.
What the bank CAN do is say "you don't have that money", or "we don't think you're actually you". The latter case, they have to ask you "hey, did you authorize this?" and if you did, they send it through. But compared to credit cards, banks tend to be more fast and loose about sending transactions through as long as the balance is okay. They simply don't care too much.
You are thinking the numbers are a couple orders of magnitude larger than the numbers really are.
How do you think local credit unions keep poping up and then going under?
Yes, and?
NACHA IS ONLY AN INDUSTRY GROUP, THE RULE MAKING BODY IS THE DEPARTMENT OF THE TREASURY.
I am aware of all of that, yes.
Consider the Keiretsu.
The keiretsu are vertically and horizontally integrated business groups in Japan, each built around their own... private... bank.
As in, it's theirs. They control it.
Suppose the free speech wing of the internet decided to get its ass together and form a keiretsu. With a real bank, that clears real transactions.
I don't think it's impossible. It's just a lot of work from people who are as lazy as Ian Fucking "Free the Code" Crossland.
Graphene is the future of money my man.
Bank runs are only possible if you write loans.
It's entirely possible to run a bank that doesn't operate on loan income. It'd just have to charge fees...
Like PayPal does.
The second you could have a positive balance at PayPal, it became a bank. Albeit a crummy one with no depositor's insurance.
To put it another way...
When you write a check, you are telling your bank, "Hey, bank, send money to here". If you have the money, and "here" exists, they send the money.
The bank doesn't have the liberty to say "We don't think you should be sending money to there". The federal courts and the treasury can, but that's a high hurdle and basically means "there" is under investigation for crimes.
What the bank CAN do is say "you don't have that money", or "we don't think you're actually you". The latter case, they have to ask you "hey, did you authorize this?" and if you did, they send it through. But compared to credit cards, banks tend to be more fast and loose about sending transactions through as long as the balance is okay. They simply don't care too much.
Because clearing isn't a loan.
Think of it as a "push". The other bank can only refuse if they don't believe that the transaction was authorized by their depositor.
It is a depositor telling their bank "take my money and sent it to here".
They can only say no if they believe their depositor didn't actually authorize it, or didn't have the money to do it.