It is not fractional reserves that cause the mischief, it is fiat fractional reserves that cause the mischief and leads to all kinds of problems.

There is such a thing as a shortage of credit under fiat 100% reserve, whether that reserve is gold or bitcoin when wealth is brought to the marketplace. Any decreed reserve causes all kinds of mischief, including a fiat 100% reserve.

A fiat 100% reserve limits growth. Saif acknowledges this.

Self-liquidating commercial paper that emerged organically in the markets in the late 19th Century solved this problem. There were no fixed or decreed reserves. Free-market banking determined the money supply. Free-market banking expands the money supply as new wealth is created and contracts the money supply as these goods are sold in the market.

The bitcoin blockchain is not required for sound banking on the STANDARD. Lightning Network is not required. Although, both are utilized in final settlements. Centralized accounting procedures suffice. Seignorage shifts from a government monopoly to the issuing banks or merchants.

Such thinking will likely be considered Bitcoin Maximalist heresy. But a fiat 100% Bitcoin Reserve Standard bank is not the same thing as Bitcoin STANDARD banking in a free and unfettered market operating in absence of any fixed reserves.