tl;dr: BTS is not a Credit Union. I think it deserves a new name/concept all together.
The traditional view of banks ( which cannot explain the current shadow banking system):
A credit Union is still a traditional banking service whereas currency is put into circulation by depositing some collateral with monetary value with the bank. Currency in this model is still viewed as tokens.
The cash flow view of banks ( which is capable of explaining the shadow banking system):
Banks are any entities which take short term low(er) risk assets in (i.e. on the left side of the balance sheet), and lend out long term high(er) risk loans (i.e. on the right side of the balance sheet), be those actual currency as in the case of banks, or higher risk equity or other assets). Because this entity has to be always balanced on its balance sheet, changes in determined risk of assets on any side of the balance sheet mean they have to restructure their positions on different assets all the time.
Interbank loans (which are the backbone of the current fiat system, both in funding and in value transmission) represent the assets of banks. The banks at the top of the pyramid have most interbank loans on the liabilities side lending out to other banks.
From a Systems Theory perspective the asset's or liabiliti's risk is entropy
.The underlying BTS tokens have 0 entropy
, meaning the underlying assets of the "BTS decentralized bank" have no risk, hense all hedges created will always be incredibly biased towards the token's value. Unfortunately this means that BTS will never be stable beyond some sort of "vibration point" (token value going up and down, makinh even hedging relatively uncertain). *
BTS does macroeconomically not work this way. It is a very different beast.
The Polymorphic Digital Assets (IMHO the best invention since the blockchain itself), or bitUSD in this case, are the result of a hedging contract. Technically no money is ever lend into existence like in the case of traditional banks.
From one of my Reddit comments:http://www.reddit.com/r/BitShares/comments/21n4p4/which_decentralized_exchange_will_prevail_in_the/cgflukq
Bitshares is a stroke of genious. They use an OUTSIDE money to price an internal moving hedge, as a result they create "polymorphic digital assets", meaning INSIDE money. I'm not sure whether the core team thought about it in this way but this is essentially what Bitshares is.
This also means that with a bitshares dominated economy any country's central bank's role would be one of a central data feed (base money) rather than transaction settling through ultimate credit facilitation.
This can disrupt the entire banking system. Not because lending itself becomes obsolete but because bitshares will make credit as a part of currency transaction mechanisms obsolete. // No more interbank lending needed to facilitate value transaction.
* Comment: To get less vibration in the system, and therefore considerably higher utility value, you need to have a feedback mechanism for the entropy of the BTS tokens. The default needs to be some entropy, probably equal to the "5%" return (I assume that will be subject to some sort of feedback model too). Token entropy might need to be able to get higher or lower too. Minimum entropy being 0%, highest being enough to increase liquidity between tokens and bitUSD. This could be how 0 fee bitUSD and token transfers could be financed.