It really is, but to answer your second question, it's important to consider *which* bank. There's reserves (i.e. balances of banks at the Federal Reserve) and bank deposits (which really are just numbers in banks' databases).

Having an account at the former is effectively what makes numbers in the database of the latter "real USD".

> Otherwise some Russian bank could just increase that number to whatever they like. And say "Look, we own 100 Trillion USD. Now let's go shopping.".

They could, but these assets/liabilities would not be backed by any reserves linked to the USD payment rails.

Reserves are theoretically irrelevant (though practically regulated) as far as transfers between accounts of a single bank are concerned. But as soon as a second bank comes into the picture, i.e. for inter-bank transfers communicated via SWIFT or otherwise, all transfers will ultimately be backed by Fed account to Fed account transfers in the background.

> So I guess USD needs to be recognized by the US somehow?

Indirectly so, yes: What makes USD "real" is the ability to transact with the larger ecosystem of US and offshore banks that have a shared agreement on what "real" USD are.

Practically, this means being connected either directly (via a Fed account) or indirectly (via a bank that itself does have a Fed account) to that system.

> Could the US simply "void" all USD that are owned by Russia?

Indirectly, yes: They can force every bank holding USD balances for embargoed beneficiaries to freeze these assets. Failing to comply could, in the absolute worst case, lead to that bank's Fed accounts being frozen as well (which would take away its ability to settle in USD with other banks).

In that case, why would the US have to act "indirectly", threatening bank A not to work with bank B? They could simply deny any transfers to and from bank B's account at the Feds, which would make any transactions impossible?

Yes, unless the banks have mutual accounts with each other that they can use to settle instead. So, if bank B is accepting to be owed money by bank A for any transfer from A to B, they don't need to settle – but there's practical limits to that, imposed by both risk and regulatory concerns. Eventually, they'll need to settle up if funds flows A -> B and B -> A don't largely cancel each other out.

> And is a transfer from A to B really a transfer from A's account at the Feds to B's?

For wire transfers and ACH, it is.

> They could simply deny any transfers to and from bank B's account at the Feds, which would make any transactions impossible?

Yes – that's in fact exactly what a freeze of that bank's Fed reserves is!

> unless the banks have mutual accounts with each other that they can use to settle instead.

So this is just based on trust that the other bank will keep a truthful score of the transfer, and there won't be a dispute at settlement time?

If the banks are often willing to trade with each other "on trust alone" like that, I suppose that shows why the Feds can't always directly block dollar transfers, but have to rely on threats of account freezes.

Exactly: Either there is trust (and external settlement is not required), or there isn't, in which case banks will usually only credit incoming transfers to their customers once the underlying funds have settled.

Practically, trust is a spectrum, and banks might only settle once the outstanding balance in either direction has become too large (that's then called "netting").

> If the banks are often willing to trade with each other "on trust alone" like that

Bank balances are ultimately only be useful to their accountholders if they can effect some payment with them. There is therefore also a spectrum of fungibility of USD balances.

If you think about it, what makes USD useful is the fact that they can be used to pay for imports from the largest economy in the world. Only very few US companies would be willing to trade with you when being paid in USD balances at some foreign bank that they can't, as one significant example, pay their taxes with.

They could also go much further. US has the power to force any bank that wants to transact in USD to freeze all Russian assets no matter the currency.

This is a very big stick.

Ish. In reality, this power is constrained by our courts. Which is why we have the privilege. A foreign person wrongly frozen can take on the U.S. government in court and win.

"I deem it legal to freeze assets of terrorists."

"I now deem you a terrorist."

The stick is real, it is very sharp and pointy; but it's a thin and targeted stick. Stab top many people with it, and it'll snap.

Or do they have another way?

Blocking Swift access makes it very inconvenient for banks to perform international settlement, because banks today rely on automated Swift messages to coordinate such transfers. However, even before Swift, international transfers were possible: by phone or telex. The banks have to find other ways to communicate, which isn't easy in practice, but not impossible. The fact that Russia has its own Swift competitor, to which some international banks might switch over time, would probably help with that.

But by freezing bank accounts at the Fed, the actual settlements - the events at which money actually changes hands - could be prevented in the first place, no matter the way in which banks agreed over those settlements. Switching back to good old telex (or another financial communication network) wouldn't help in such a scenario. Banks would have to fall back to exchanging big suitcases of dollar bills, which obviously wouldn't practically work.

Because no bank would survive this, they would immediately cooperate when confronted with such a threat and freeze any Russian-held funds, even if those funds weren't actually held in USD in the first place and thus would theoretically be unaffected by the Fed account freeze.

I don't really understand this distinction. But before I can ask a question, there are some points about my understanding of how payments work, so that you can verify me:

1. All payments, no matter which payment system, can be performed only between 2 bank accounts. In order to send or receive money I must have an account in a bank.

2. A bank is pretty much defined by regulations it must follow. Following these regulations gives a bank some amount of trust/authority to say that a given person/entity has that much money within this bank. This money don't necessarily have to be backed by anything, so, ultimately, "it's just a number".

3. All transfers in a given currency are directly or indirectly performed via central bank that emits this currency (or FRS in case of USD). This is the ultimate top-level ledger for transfers in this currency.

4. So, ultimately to transfer non-physical assets (i.e. fiat money) 2 authorities for a given currency (i.e. central banks, or banks that follow CB regulations) must communicate one to another that a given number is deducted from account X and added to an account Y. There's nothing more.

So, if money is just a number, "transferring" it is just a message. So why exactly SWIFT is a messaging system that doesn't transfer money, and how money is transferred, then? And what (in general terms) even are these messages SWIFT is needed for, that aren't money transfers?

That's why I consider the capability to settle the individual transfers to be more important than the capability to negotiate these transfers, and the time of settlement to be the actual time at which wealth is transferred. Before that moment, the transfer is effectively incomplete, which usually doesn't matter much for smaller sums of money, but in case of large amounts that introduce large imbalances between banks you can be pretty sure the banks will want to settle among each other first before the recipient gets full access to the transferred money.

However, all of this is based on the assumption that Swift is used for inter-bank communication as in "non-central-bank to non-central-bank". I always assumed that central banks would have their own communication channels with the non-central-banks and would not have to use some intermediary like Swift, as they themselves are a central entity able to standardize message formats and such.

But as a short-term measure, revoking SWIFT access is probably also somewhat effective. As you say, setting up alternatives is not impossible, but not easy either.

Then you had to trust that they didn't hand you false coins. After that came false checks. Nowadays you need to trust that online shops aren't trying to scam you.

Essentially whenever you do business there will be one person that needs to make the first move, crypto or fiat, someone always needs to deliver first. But if these two business partners don't trust one another then they need a third party they can both trust.

In our world these are most often banks or notaries. People that will take money from person A hold it till person B delivers then pass it on. If person B doesn't deliver person A gets their money back, if person A doesn't pay person B doesn't deliver.

Now, crypto is trying to claim that smart contracts will solve this in crypto world but that raises the question of who executes these smart contracts and who feeds them information. After all this once again feeds back into the trust problem.

Essentially you need banks not because they are modern or technologically up to date or fast, but because they are in fact fully capable of clawing money back if the laws allow them to, unlike crypto where your money is secured by math.

Because even if some people don't like it, the chance of the average person being scammed is far higher than your bank or the government misusing the trust you have given them and taking your money.

[0] Including Ethereum.

Yes. This is not a technology problem. This is how banks have been working for the last 400 years.

You can't get rid of banks because banks are what create the money. The crypto people have a terrible understanding of what money is.

The Bank of England published a summary of how modern banks work. See https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/m...

> It can't be just a number on a computer in a bank, right?

It can and it is, see the BOE paper.

> So I guess USD needs to be recognized by the US somehow?

This is a complicated question that will start a flamewar, but basically, any bank in the world can create dollars out of thin air given adequate collateral. Read about "Eurodollars".

This is true, but it's actually sort of a specious point. What a eurodollar deposit "really" is, is just a short contract. Your European bank takes your exchange and promises to give you back dollars when you ask for them. That they may not have them right now is just a technical detail. But the value of the dollar is still set by what the market is willing to pay for it. The bank going "short USD" is a risk it takes, not an inflationary pressure per se.

So... sure. Foreign banks can create dollars just like brokerages can "create stock shares"[1]. Except, they really can't. They're just playing accounting tricks.

[1] Or, more relevantly perhaps, how one crypto exchange can create wrapped tokens representing foreign coins. This capability was part of the exploit chain that led to the DeFi hack last month.

The contention upthread was that foreign banks could do the same thing to print dollars. And, again, it's complicated. They sorta can, but only in the sense of placing a gargantuan short bet on the dollar. (A ton of short selling on a small security can push the price down for the same reason). So no one does that, because no bank wants to play that kind of game (or is allowed: all those large foreign banks are themselves regulated by their own national regimes).

What is even more amazing is watching these same people (no necessarily you OP, but prevailing opinion on HN...) then go on an argue that a permission-less distributed ledger like Bitcoin is a completely unnecessary waste of resources.

Hating the way modern banking works doesn't mean blockchain is a flawless solution. It comes with a ton of its own problems (not the least of which being that it's utterly inscrutable to normies). I personally would prefer we go back to currency backed by gold or some other comparable commodity (silver, etc.)

Everyone who transacts in a fiat currency digitally has a defacto third (or more) party in the bank that mediates the transaction, and even non-digital cash transactions inherently include the central issuing bank (who you must trust not to debase the currency...just ask a Turkish citizen how that's going).

Digital fiat currency is indeed bank databases. Similarly, stock markets and stock ownership are also stored in permissioned databases. Both are highly regulated and enforced by law. For people in countries with a high level of rule-of-law, and a stable financial system, I’d argue that this works reasonably well.

I also think that blockchain and other crypto currencies can be very useful. Especially for people in countries where rule-of-law is not as important and corruption is high.

I agree, but that's not always obvious at first glance. For example, I would've said Canada qualifies as a stable rule-of-law country with strong property rights up until a couple weeks ago.

it certainly is when it immediately de facto centralizes! which is in the event what has happened

In what respect? Hash power is well-distributed. Consensus (formal and informal) is working as expected.

Your internal balances are only good so long as the rest of the system trusts you. Magic up some fake balances and good luck getting the rest of the world to continue to take you seriously. "You want us to believe you've actually got that 100 Trillion? Show us?" How would this Russian bank spend these trillions? They can't cash out, because they don't actually have that much paper USD. Transfer it to another bank somewhere more reputable? How are you going to make those transfers clear?

I invite you to open your own bank and print yourself ten million dollars out of the air. Good luck converting that number to cash or transferring it to anywhere else!

Banks do their due diligence for a reason, but they don't always get it right. And a certain amount of "bad loans" is expected anyway. Part of the fees and interest they charge is to cover that.

But that's very different than simply printing yourself 10 million dollars. Or even just ten dollars.

It's also different from you starting a bank and saying you loan me 10 million dollars. I now have a statement saying I have 10M in your bank. I try to take that to a "real" bank to cash out. It's not gonna work.

You could start here: https://www.federalreserve.gov/releases/h41/20220224/

H.4.1 is a really useful and important data set. For example, you can see that US Fed is holding T2.7$ worth of mortgage backed securities i.e., it's funding them.

> Could the US simply "void" all USD that are owned by Russia?

Beyond a certain threshold those USDs are typically stored as US Treasury bills because it's too risky to deposit billions of $$ in bank accounts. The risk of bank going under is real at those deposit levels.

For anything more I highly recommend reading up Fed Guy blog [1]. It's one of the best sources of this information I've come across; he's extremely concise, no-jargon and explains the core principles really well.

While at it, take a look at this BIS data[2]. tl;dr Russian residents owe ~B121$ to other countries' banks.

[1] https://fedguy.com

[2] https://stats.bis.org/statx/srs/table/b4?c=RU

Money is an IOU from the bank. So that's what all banks do. But they'll need assets on the right side of their balance sheet.

Consider the 2007-2008 financial crisis. Abstractly, investors believed that homes had significant value until, one day, society realized the value didn't exist in reality but only "on paper." We know that investment bankers were hiding the problem until the proverbial lid blew.

You might consider that our current financial paradigm has never been tried before in human history. For thousands of years, currency was based upon various measures of value which attempted to be as objective as possible. Semi-rare materials (e.g. gold and silver) and difficult-to-replicate coinage were some examples. The US dollar was decoupled from the gold standard under the Nixon administration. The end result is, one dollar now holds value relative to the amount of dollars in existence. To increase the relative amount of precious metals into the world is relatively difficult (actual physical labor is required), but to increase the total amount of dollars in existence is as simple as updating a database entry.

If financial controls work exceedingly well, the current economic system is viable. We know, however, that they don't.

We know no such thing. The only objective fact is that there have been fewer financial crises since the dollar went off the gold standard than before.

Financial controls don't work perfectly, but having money tied to a commodity is fraught with its own difficulties. It's actually quite handy to have fine-grained control over the money supply that is not coupled to external physical circumstances because then at least we have the option of controlling it to produce better outcomes even if we don't always succeed.

Following that logic, every country can simply print fiat money until everyone is rich.

This idea of commodity money is far detached from how it actually works. Thread has several good links if you want to learn how it actually works.

What is the reason behind so many people believing this? Do they teach it like this at school? (This resurfaces everytime money is discussed here)

Do you really think it's that easy? That *nobody else involved in the system ever was like "wait, what if someone tries to defraud us?"? That there aren't various levels of checks and methods to prevent such easy, easy things?

That, say, the FDIC in the US is just telling banks "sure, we'll insure your bank accounts, don't bother sending us verification, we trust you!"

Whenever you hear someone complain about onerous reporting requirements or other such business regulations, remember that those things get put in place to catch shit like this.

https://abcnews.go.com/Business/story?id=6514493 "The impact of Western Director Dochow's approval to record the capital infusion in the quarter ending March 31, was that IndyMac was able to maintain its 'well-capitalized' status," ...

https://www.cnbc.com/2011/11/23/financial-fingerpointing-tur... ' Even if regulators are involved in wrongdoing, they have some immunity. Internal disciplinary measures are rarely taken against regulators who perform badly in their jobs, say government officials. '

Ask anyone in accounting in a large enough corporation how many millions of dollars go unaccounted each quarter.

Ask the Inspector General of the Defense Department how many trillions of dollars are fudged (answer: $2.6 trillion as of 2016).

https://fred.stlouisfed.org/series/BOGMBASE

[citation needed]

"Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money."

So on the asset is a loan made by the bank.

That is true, but arguably not a consequence of money being digital, but rather of fractional reserve banking.

Physical vs. digital accounting is largely orthogonal to full/fractional reserve banking.

These are contradictory. The banks with full reserve banking can't make loans from easily withdrawable deposits. They can do that only with term deposits that can't be withdrawn for a specific period

Is it still true though? The Fed averted this through QE by buying assets of questionable value at the face value from the illiquid banks and providing them with enough cash.. didn't they?

In a computer account. Here's a 22-second clip[0] from a 60-Minutes interview with a former chair of the Federal Reserve talking about how money is lent to banks. Literally just numbers on a computer.

"...We simply use the computer to mark up the size of the account that they have..."

[0]: https://www.youtube.com/watch?v=hiCs_YHlKSI

Here’s a good example: when you borrow $500,000 from the bank, the bank’s funds don’t go down by $500,000. The bank just creates that money out of thin air, by adding to the number in your bank balance. Eventually that number goes down as you repay the loan, so it all washes out in the end (modulo interest, defaults, etc).

As an aside, that’s why low interest rates stimulate the economy: more loans are made, and more money is created, spurring more economic activity.

While technically true, this is a bit misleading, because if you actually /do/ anything with the $500,000, that does in fact cause the bank's funds (i.e. reserves) to go down.

If you withdraw it in cash, then the bank will have to give you some of the Federal Reserve Notes it has in its vault, and when they request more from the Federal Reserve, their account there will be debited $500,000.

Or if you send it to someone at a different bank, then to settle the transaction your bank's balance at the Federal Reserve (or another intermediary bank) will go down by $500,000, and the other bank's will go up. This tends to average out if both banks are receiving deposits and making loans at equal rates, but if they become imbalanced the bank is at risk of its reserves falling below the requirements, which it must remedy or risk bankruptcy.

You're right that low interest rates make it easier for banks to create money, though, because one option a bank has to remedy low reserves is to borrow them from another bank at an interest rate that the Federal Reserve can influence.

And while that is indeed technically true, it only applies to money withdrawn as banknotes. Given that most of the economy is electronic transactions, that loan is to all extents and purposes real money created by the bank out of thin air (modulo capital requirements to back debt).

Only the Federal Reserve can create truly unlimited amounts of money without the risk that customers might request transfers that exhaust their reserves.

Complying with reserve requirements imposed by the Federal Reserve on banks help to mitigate this risk, but they are not the true restriction. Even if the reserve requirement was zero, banks would need to keep some reserves or they would be completely unable to fulfil requests to transfer funds to other banks. And even if a bank exceeded the reserve requirement, for example by keeping 50% reserves rather than 10%, they would be insolvent if customers requested 51% of balances transferred out and were unable to cover it with loans from other banks.

It's two numbers in computers. It's a number in the computer of the bank that issued the money, and it's a corresponding number in the computer of whoever is holding that money as an asset.

> Otherwise some Russian bank could just increase that number to whatever they like. And say "Look, we own 100 Trillion USD. Now let's go shopping."

It's not possible for a Russian bank to pretend they're holding more USD assets than they really are. The issuing bank knows how much USD is in Russian bank's deposit account. The Russian bank can issue its own USD liabilities (i.e. deposits) which are IOUs for the USD reserves that the bank holds on the asset side of its balance sheet. If the bank issues too many USD liabilities, they risk suffering a bank run that drains their USD reserves and puts them out of business.

> So I guess USD needs to be recognized by the US somehow?

Not exactly. It's possible to have a USD-denominated deposit account at a bank that h deposits at banks in the US. Most of the USD-denominated instruments in the world are not directly recognized by the US. But the international monetary system is hierarchical. Every USD instrument is an IOU for another USD instrument. If you follow the chain of IOUs, eventually, you'll get to the Fed.

The "single source of truth" is the Federal Reserve. Member banks (about 10,000 US domestic banks) can hold reserves directly at the Fed. Any reserve bank can directly transfer Fed reserves to another member bank or to the US Treasury using FedWire. The Fed "creates money" simply by crediting a member bank's reserve.

This is done in two ways, one is by paying interest on reserves. So if you're a member bank holding one million in reserves, the Fed simply bumps your balance up every night to reflect your interest payments. The other is by the Fed conducting "open market operations". When it wants to stimulate the economy by "providing liquidity" the NY Federal Reserve trading desk will buy treasury bonds and pay for them simply by crediting the balance of whichever member bank sold the bonds.

Member banks themselves can "create money" in the form of demand deposits. If you have one million in your checking account at Chase bank, all you really have is a promise by Chase bank to give you or whoever you want to send money to one million dollars. Essentially money is created the same way the Fed creates money, your checking account is nothing more than a credit in Chase's database.

However Chase's ability to create money is highly regulated and constrained. Banks have to conform to strict capital and leverage constraints. The OCC and other banking regulators will require that Chase hold enough assets in high enough quality to cover its deposit "liabilities". Some fraction of those assets will be dollars held as reserves at the Fed. Some will be bonds or loans, i.e. promises by other high-quality actors to pay dollars. Some of those assets could even be risky stocks, low quality bonds, commodities, etc. However the "risk-weighted" leverage ratio quickly scales up with risk.

In exchange for this regulation, deposits held at Chase or other member banks are treated as equivalent to Federal reserve dollars. That's because if for some reason, Chase is unable to pay back its depositors when they demand their money back, the Federal Reserve will "create money" to meet the obligations. This is essentially why bank runs no longer exist in modern banking.

Then there's the concept of "money markets", which is short-duration, high-quality assets that are essentially treated as "money-like". Often this tends to be short-term commercial paper from high-quality corporate issuers. A promise from Apple to pay $1.00 in 30 days is treated as "almost a dollar" by most of the market. In this sense, Apple can also "create money". But it's highly constrained, because it would quickly lose its credit rating or breach covenants in its longer-term bonds if it did so.

Finally there's the concepts of "eurodollar deposits". These are dollar deposits held at non-American banks but denominated in dollars. For example you could hold $1 million dollars at Mitsubishi bank in Japan, and you have a claim against Mitsubishi to pay out dollars whenever you want. Mitsubishi is not an American bank, and therefore is not directly regulated or insured by the Federal reserve. In some sense this makes eurodollars slightly less safe than dollars held at domestic member banks.

That being said Mitsubishi is regulated by Japanese banking regulations and implicitly insured by the BOJ (central bank of Japan). Mitsubishi will also make sure its dollar liabilities are never that large relative to its yen-assets. In the case of Mitsubishi failing, its highly likely the BOJ would bail them out by creating yen in the same way the Fed creates dollars. Some of that yen could be converted to dollars on the open FX market, and make the dollar depositors whole. Hence eurodollars are essentially just as safe as regular dollars as long as they're inside another high-quality banking system.

This is not exactly true. Chase, like many other US banks, is regulated by the Fed, and deposits at Chase are insured by the FDIC (Federal Deposit Insurance Corporation). If Chase becomes insolvent, the FDIC will take over, pay depositors up to the FDIC insured maximum, and liquidate any Chase assets. The Fed is not required to do anything in such a situation.

The Fed may choose to conjure up some new money and loan that new money to Chase, and as Chase is a systemically important bank, the Fed might well do that before the FDIC steps in, but they are not required to.

The key feature of this system (and what everyone is ignoring) is bank accounts that x/German bank has at y/Russia bank (this is also the actual means of transaction for SWIFT).

So in your example, 'y bank erroneously says we have $100tn' would actually just mean 'y bank is willing to credit the account of x bank by $100tn.'

If x bank then tried to pay y bank for a separate transaction with those fake $, then y bank is the loser anyway.

EDIT: Put alternatively, 'making up' USD is a near equivalent to making a loan, which is sort of the core thing a bank does anyway.

A bank could easily create fake money into its own accounts, but it would have trouble transferring that money over to other banks. I wrote extensively about this topic here: https://www.attejuvonen.fi/money-out-of-thin-air/

In fact, isn't that indistinguishable (mathematically) from paying interest? The bank's internal accounts all go from X to Y. In theory, the bank should made more money that that in total, so at any given point the sum of all accounts is less than the banks money and accounts recieveable (usually via loans). And the bank can provide that money to other people if needed. But if a bank paid 1000% APR on savings accounts, all that would happen is the bank goes belly up and a lot of those accounts won't be worth the numbers they claim to have.

The US sanctions (freezing their US assets) has more effect, in that regard, than a SWIFT blockade. The US seems to be the interested party in this war, and Germany is much less enthusiastic about it. Remember, SWIFT is a Belgium company and the US has been hostile to European financial institutions lately.

Which does make one wonder how easy it'd be for your trick to work.

North Korea is a major printer of fake $100 bills, a piece of paper that's actually worthless but others are willing to trade $100 worth of goods and services, or exchange for a bank transfer. Until a bill is found to be fake and destroyed, I guess there really is $100 more in circulation, and when the last person found out the note is fake, in effect NK has robbed them out of $100.

When people talk about the manual inefficiencies of finance, it's referring to all this happening in the backend behind the abstraction of quick/automated digital payments in fiat currency. It gets especially complex in international finance, hence SWIFT etc.

Slightly related, I'd have to find it again, but I recall there was at some point an assembly level hack on some Oracle database holding core banking in one country.

"Note that it is U.S. government policy that all designs of Federal Reserve notes remain legal tender, or legally valid for payments, regardless of when they were issued. This policy includes all denominations of Federal Reserve notes, from 1914 to present as per 31 U.S.C. § 5103." https://www.uscurrency.gov/acceptance-and-use-older-design-f...

Despite not being legal tender anymore, the Deutsche Bundesbank changes your DM notes, if they are after issued after 1948 (https://www.bundesbank.de/en/tasks/cash-management/dm-bankno...). The currency has been introduced in 1948.

If you feel inclined to do so, you can spend a 1 Yen note from 1885 https://en.wikipedia.org/wiki/Banknotes_of_the_Japanese_yen

So, inflation and wear and tear takes old notes out of circulation rather than expiry.

The purpose of the new series is just to keep up with counterfeit money, to include newer security measures.

But yes, countries in the world have revoked currencies from time to time.

Here for instances the information if the German Bundesbank, where you can still swap with the official rate of 1.95583 DM/€. https://www.bundesbank.de/de/aufgaben/bargeld/dm-banknoten-u... (Currently there is a restriction of in person service due to corona, but if you trust mail it works, else you have to wait for that Corona restriction to be lifted)

That exchange works without limits or anything.

I'm trying to search for this, but I can't find anything about a 20 year validity.

This total sum seemed to be far beyond the robbers' actual intentions, and the Northern Bank quickly issued a new banknote design, offering free exchanges for anyone with the old one.

Of course the robbed money had serial numbers, so it's now generally believed the IRA just burned most of the stolen cash.

Yeah, they can, and do. This is what Eurodollars are. And why the World is continually on the brink of financial collapse whenever Dollars get too scarce.

It's a distributed shared ledger.

If this hypothetical Russian bank attempts to add fraud to the ledger, it will cause a fork.

To fake money you need to forge transaction with input from somewhere, this can be checked.

The country north of USA targeted a certain group and took their funds earlier this month. https://www.insurancejournal.com/news/international/2022/02/...