People are always going to be greedy. I'm not sure what you think will change in the future that will make large actors in the cryptocurrency space behave any more ethically.
> Proof of reserves and audits are extremely easy in crypto and it doesn't require any regulations.
A. So why is no one doing them regularly?
B. Is "proof of liabilities" similarly easy? What stops a company from taking out a massive loan "off blockchain" using their blockchain assets as collateral?
Why? Because you say so? Fractional reserve banking is generally heavily regulated such that most of the value created from new loans are tied to actual physical value in the real world. Fraction reserve banking is genius in my opinion, because if you want to take out a loan to build say a mine, or an oil well, that you know is going to generate millions in value, you're not fully dependent on finding smoe kind benefactors to loan you their own money to open that mine. If you can prove to the bank that you are likely to be able to create value greater than what you're borrowing, they'll create that money for you. And that's how it should be. If you're adding say $10 million to the economy, it's not a problem at all that $5 million was created out of thin air to enable that. In fact, that's exactly what you want. Ideally nobody who is able to create significant value should be stopped just by the lack of capital.
There are cases where lending isn't tied to value creation, like loans for consumption or stock gambling. Those should be regulated out of existence, but that's not fundamentally a problem with fractional reserve banking.
Loans for purchasing land is also iffy.. I think Georgism may be a solution to that.
Crypto is the exact opposite of a well regulation fractional reserve banking system. The creation of cryptocurrencies, espcially with PoW, is tied to the destruction of value (wasted electricity and silicon), not creation of value. IMO, that makes it fundamentally unsustainable.
> Proof of reserves and audits are extremely easy in crypto and it doesn't require any regulations.
You say that, but everything we've seen so far indicates the exact opposite. Perhaps it's easy in theory, but nobody seems to be interested in doing it.
I suspect with all the regulations, external systems and oracles necessary to make sure it's all correctly audited, you'll find that you could just as easily do without a PoW/PoS blockchain and have a far more efficient system. Maybe a proof-of-authority blockchains can make sense, just so you have some explicit cryptographically signed trace of who you're trusting in a transaction. Trustless systems are a lie. You'll always find you need to trust some humans/organization in the end.