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Scriptural Money

Scriptural Money, analogous to private bank money, refers to funds held in current accounts at a commercial bank, where they are recorded as money-units as part of a banks’ record system. A given quantity of paper money is deposited in a bank and the bank opens a current account for the same quantity, where there will be only records of movements of money-units. In addition commercial banks create scriptural money every time a loan is made to customer. This has led to the fact that now that vast majority of money is only represented by numbers in accounts of commercial banks 1.

This helps to facilitate transactions, which can now be made without the need to exchange paper notes, and will then be made through an exchange of information between the current accounts of the customer and supplier. It is also important to note that, at commercial banks, the holder of the current account can, at anytime, if it is at sight, transform the numbers in their account into paper money. 2

References

  1. Ryan Collins 2012
  2. Centre D’estudis Joan Bardina, The money system today, available at http://chalaux.org/mtemuk04.htm

    New economics foundation, (2012), Where does money come from

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