The biggest thing I learned in my global finance class is that ‘CASH IS KING’. It doesn’t matter how great or bad your balance sheet is if you can’t meet payroll or pay the monthly electrical bill. Cash is typical a cash account, or more usually, an operating line of credit with your bank.
In other words, cash is just (instantly) transferable credit. If you have cash in a bank, or ecash in a mint, it’s not really about fractional reserve (good/bad balance sheet), it’s about getting your cash out NOW! If you can clear your ‘cash’ instantly to another mint/bank, it forces them to be honest. If 100% do this on a daily basis, then 100% reserve is the only choice; if only 5% do it, then a 5% reserve will do the job. It’s the bank or mint operator that has to manage the risk.
FWIW, I have operated a Cashu mint for over two years now. Since I am a private operator, I don’t have to tell anyone my reserves. The only thing that I need to do is clear out instantly for anyone using my mint.
Tim Bouma
npub1q6…nx7d5
2024-11-10 13:14:32
Author Public Key
npub1q6mcr8tlr3l4gus3sfnw6772s7zae6hqncmw5wj27ejud5wcxf7q0nx7d5Published at
2024-11-10 13:14:32Event JSON
{
"id": "1439432ec7eb26b18841fbf8b7cc0df3489b40063d63376d4ef4bdf4624eac8a",
"pubkey": "06b7819d7f1c7f5472118266ed7bca8785dceae09e36ea3a4af665c6d1d8327c",
"created_at": 1731244472,
"kind": 1,
"tags": [],
"content": "The biggest thing I learned in my global finance class is that ‘CASH IS KING’. It doesn’t matter how great or bad your balance sheet is if you can’t meet payroll or pay the monthly electrical bill. Cash is typical a cash account, or more usually, an operating line of credit with your bank.\n\nIn other words, cash is just (instantly) transferable credit. If you have cash in a bank, or ecash in a mint, it’s not really about fractional reserve (good/bad balance sheet), it’s about getting your cash out NOW! If you can clear your ‘cash’ instantly to another mint/bank, it forces them to be honest. If 100% do this on a daily basis, then 100% reserve is the only choice; if only 5% do it, then a 5% reserve will do the job. It’s the bank or mint operator that has to manage the risk.\n\nFWIW, I have operated a Cashu mint for over two years now. Since I am a private operator, I don’t have to tell anyone my reserves. The only thing that I need to do is clear out instantly for anyone using my mint.",
"sig": "b0ae8d6804d6862870746afeef9ce8f00bf5b17bae0296e6ee3b891a30eb1ca0b5bdf6934fb4c4e20bb16fe5906a000e2a8d55f2b23c8f74f08b0c9352acdb96"
}