Money is not created through fractional reserve banking. Money is loaned into existence by commercial banks.
Similarly Coinbase can sell you coins which don't exist. Like a bank it doesn't have to make good on this IOU until you withdraw your funds.
It is fractional reserve banking which allows banks to loan money into existence, as long as their reserve is at least a certain fraction of their total loans. The alternative is full reserve banking, where banks aren't allowed to do that - or no-reserve banking I suppose...
Which with the volatility of Bitcoin puts them in a situation where they can underprice an asset if they loan it out. Bitcoin loaning is rather rare because of this.
