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# Bank Money

## Definition

A form of money represented by credit in the books of a bank, backed by actual deposits of precious metal, which maintains a stable value equal to the mint standard. Bank money is superior to current currency because it is not subject to wear, clipping, or debasement.

## Source Chapter

Book IV, Chapter 3

## Context

Smith describes the Bank of Amsterdam as the archetype, explaining how bank money provides security, transferability, and a reliable medium for international trade, while also generating revenue for the city through various fees and the interest on deposits.

## Economic Domain

Exchange

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