Are we about to get paper Bitcoin like paper gold?

Maybe this has been asked before but I’m lazy: what’s stopping Wall Street or these new public mining companies from doing fractional reserve with BTC, lending out way more than they actually hold? I know, “not your keys, not your coins,” but if this becomes the norm it drags down the whole system and screws even people who self-custody.

Edit: I know the new GENIUS Act forces stablecoins to be backed 1:1, but as far as I can tell there’s still no clarity on Bitcoin itself. So could companies technically create “paper BTC” the way banks created paper dollars?