A Quick Reminder Why Bitcoin was Invented in the First Place

All ties between the financial system and gold were severed in 1971 when Nixon decided that the USD would no longer be exchangeable for a fixed amount of gold.

This exacerbated the problem, because there was now effectively no limit anymore on the amount of paper money that banks could create.

From this moment on, all money was created as credit. Money ceased to be supported by an asset. When you take out a loan, money is created and lent to you. Banks expect this freshly minted money to be returned to them with interest.

Sure, banks need to keep adequate reserves. But these reserves basically consist of the same credit-based money. And reserves are much lower than the loans they make.