When you transfer money from one bank to another, are they just moving virtual bits around? Is anything backing those transfers? What prevents banks from just fudging the bits and “creating” money?

Question

When you transfer money from one bank to another, are they just moving virtual bits around? Is anything backing those transfers? What prevents banks from just fudging the bits and “creating” money?

In: 1559

Answer 1

The bank is just the middleman but tis the fed that controls the money.

And yeah they can create as much as they want with 0% collateral, in fact

1 out of every 3 dollar was created since 2020