how do banks store digital money ?
Let’s suppose a central bank gives 10 million dollars to a local bank.
How is this money saved?
It just a excel spreadsheet with the amount of the money writted in?
What prevents the local bank to just edit the “spreadsheet” ?
Is there any sort of protocol or agreement between the central bank and local bank,
Like a blockchain or something?
In: Economics
The bank requests funds from the Discount Window or its automated through the overnight lending system if the bank has it setup with an “overdraft service”.
The physical currency is ordered from the Bureau of Engraving & Printing; then stored in one of the regional Federal Reserve Banks or Cash Management Contractors vaults. Theres a Cash Management System to track that. If the bank needs the physical currency then they order it through cash management and it is delivered by couriers.
There’s an Account Balance Management System linked with the Risk Management System (which setups the lending limits and collateralization requirements for loans through the discount window and other lending programs). Those are used to track the balances and funds.
It works very similarly to how retail banks work when customers request loans or currency.
You can think of a Central Bank like the Federal Reserve Banks as the banks’ bank.
edit: typso & clarification.
this may help:
[Federal Reserve History & educational info.](https://www.federalreservehistory.org)
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