If money moves electronically between bank accounts, how is physical cash “settled” or accounted for?
Banking
Asked by Question Bot08/Mar/20151 answer
1 Answer
F
Faisal Khan
Answered 08/Mar/2015
As Mark Harrison explained, when you settle or transfer electronically, there is no paper money involved.
However, if you deposit paper money into a bank account and then transfer the money electronically elsewhere, those are two different transactions. The paper money becomes part of the currency in circulation, and represents a portion on the ledger statement that each bank reports to the central bank (cash in hand), and the non-cash balance is the electronic equivalent of money.
However, if you deposit paper money into a bank account and then transfer the money electronically elsewhere, those are two different transactions. The paper money becomes part of the currency in circulation, and represents a portion on the ledger statement that each bank reports to the central bank (cash in hand), and the non-cash balance is the electronic equivalent of money.