> I am not about to take out a loan in a hard currency when perfectly good inflationary currencies are easily at hand.
Assuming the interest rates are the same, I'd agree. Would they be?
Assuming the interest rates are the same, I'd agree. Would they be?
I doubt they'd be the same in either nominal or real terms. But that's a side issue.
You could already do what you're talking about with gold. A bank could offer gold savings accounts that pay interest on gold loans. They don't do it. Borrowers are deflation-averse and no one wants to deal with the exchange rate fluctuations.
BTC has some legit uses (like buying unjustly banned consciousness-expanding products over the internets) but the built-in deflationary death spiral in its design pretty much ensures that it will never be a serious full-spectrum parallel currency, much less a replacement for the dollar and euro.
When Bitcoin is the primary currency, there will be interest-bearing Bitcoin deposits.
http://bitcoin.org/en/faq#wont-bitcoin-fall-in-a-deflationar...
Same goes for the borrower and deflation risk.
Edit: I guess if the deflation risk tolerance for the borrower and the inflation risk tolerance for the bank are asymmetrical, then you would just end up with being able to loan one or the other. I suspect, per Slurry's point, that it's BTC that loses here.