technically it is compatible. Think for example you have some ripple banks offering bitcoin. They could FRB. hell, mtGox could be FRBing right now. It's all about transaction cost. If something comes along that is treated by the public and accepted "as if it was a bitcoin" and its transaction/storage cost are even lower than bitcoins, then FRB will likely happen.
+1
If mtGox (or any exchange for that matter) ever starts offering interest on coins deposited by giving out loans in BTC, we should all be very afraid of FRB. Not that I think they would do something so brash, but I wouldn't be surprised to hear that the amount of BTC on mtgox at any given time is some crazy number like 100K+.
Similarly, it could also happen with payment processors that deal with large amounts of BTC and merchants who prefer to keep their balance at the payment processors.
We shouldn't fight FRB, it happens naturally in any currency system. However, we should demand audits on entities who store BTC long-term that have the capability and a profit motive to engage in FRB.
Such an audit is actually pretty simple to do using the blockchain (just publish cold storage address(es)). I remember after the mtGox hack that MagicalTux
prooved to be in possesion of 424,242.42424242 BTC by moving them in the blockchain. It's not like rival banks have to demand to see all the silver or something.
This means that it's easy for some "institution" to proove to the customers/public that it's indeed adhering to its own reserve rules and therefore the market participants can decide for themselves wether or not to put their money with those people or not.
