Four Types of Money

  1. Fiat Currency: Outside of the trackable banking system which is useful criminals and unstable foreign governments
  2. Bank Deposits: Created by commercial banks via loans
  3. Central Bank Reserves: Created by the central bank, never leaves Central banks balance sheet,
  4. Treasuries: Debt backed by the federal government, useful “money” for large investors where the FDIC 250k insurance limit is exceeded. Also pays interest and is highly liquid

1

References

1.
Wang, J. J. Central Banking 101. (Joseph, 2021).

Links to this note