In Fiat Standard lending creates money. Whenever the debt is fully paid the monetary supply increases (principal + interest).
What happens under bitcoin standard? Assume all the bitcoin has been mined and BTC has become the world reserve currency.
If some lending bank lends it's borrowers X BTC at some Y% interest rate, how can borrowers pay back the interest in BTC but not increase the money supply!
How this situation is handled in a deflationary Bitcoin Standard!?