What's the result of this? For the loaner and borrower, less loans and more careful allocation of resources. For society as a whole, a smaller but more robust banking system not dependent on bogus money.
Imagine the scenario such as this pandemic, where a gov't (or really, any entity) needed to borrow to weather the storm, but is unable to as nobody wants to lend. The world would be worse off than today.
Maybe this change ends up being worse, but given that central banks are a century's long experiment, I say we should give a new system a chance. It looks like more power would be given to the individual and this is a good thing in my opinion.
Coinbase is not using fractional bitcoin reserves to lend out to anyone. It’s a collateralized loan similar to a HELOC (the equity in your home is collateral) or a margin loan from a broker (your equities are collateral).
They want 3x the loan amount because BTC is a volatile asset, and mass margin calls on your customers if the price drops precipitously is bad for business.