Then they start lending it, more than what is deposited, then fractional reserve starts and then inflation follows, then interest rates on Bitcoins need to be regulated by a Central authority, and Bitcoins follows the same route as gold has - becomes a fractional backup for lots of paper of more value issued.
Maybe. It was more of an idle musing than saying "this is a good thing" ... if bitcoin infects the banking system in any way shape or form it can only be bad for the fiat, fractional reserve model I think ... it will be like a trojan attack. They hate gold enough as it is, but this would be like gold 'n silver in the vampire's veins rather than the solid physical lump anchoring them down. Electronic money is how things spun so out-of-control in the fiat money factory in the past 2 decades. Electronic gold will be a death sentence.
