[tsimionescu]

You would still need a lending infrastructure outside of bitcoin to handle the economy, and then it would be trivial to return to fractional reserve banking with bitcoin instead of dollars. As long as people don't all call in their debts at the same time, which would be catastrophic either way, the system would work with bitcoin just like it works today (if bitcoin weren't so ridiculously slow and expensive to register a transaction, that is) .