What you're suggesting is far larger than a credit union. You're suggesting the banking equivalent of what Elon says Twitter will be. You're going to need to operate in more than just the US if you want that, and European rules on banking are very strict. To create an international bank is a huge endeavor. It's why you don't see new banks pop up that often.
If you limit yourself to just operating in the US, you might be able to start with a far lower amount, but there's still pitfalls
If you don't have branches, your weak point is your website/app being blocked in some way, if you do, that's a cost you have to bear.
If we had someone serious about it looking into it, it might be possible. You'd also have to have a buffer to prevent bad actors creating a bank run.
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.
What you're suggesting is far larger than a credit union. You're suggesting the banking equivalent of what Elon says Twitter will be. You're going to need to operate in more than just the US if you want that, and European rules on banking are very strict. To create an international bank is a huge endeavor. It's why you don't see new banks pop up that often.
If you limit yourself to just operating in the US, you might be able to start with a far lower amount, but there's still pitfalls
If you don't have branches, your weak point is your website/app being blocked in some way, if you do, that's a cost you have to bear.
If we had someone serious about it looking into it, it might be possible. You'd also have to have a buffer to prevent bad actors creating a bank run.
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.
If you don't offer loans, what stops "real" banks refusing your customers loans purely because they are with you?
The problem with fighting the system is that every little thing has to be heavily protected from shitty tactics.
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.
I think you missed my point here.
What stops your customers being refused loans from other banks because they're with you?