It's an illusion, this making mountains of molehills.
Bitcoin for its other concerns can not be fractional reserved.
If I deposit one thousand bitcoins, I control them, but I can only loan 1000. When your deposit expires the loan has been paid back. No currency was magicked into existence.
Gold and silver coin work the same way.
"A bank that issues more notes than gold and silver held in its vault is a cheat on someone." ~John Adams.
Free includes debt-free!