When transferring money from one bank to another digitally, what exactly is being transferred?
In: Economics
Its trading IOUs
All your bank account really is, is the bank saying they ‘owe’ you your balance whenever you’d like it. And of course, you trust them to pay you when you want it.
All this does is shift that. Lets say you transfer $100, the other bank now has an IOU you for $100, and your original bank takes $100 off their IOU to you.
Latest Answers