768 B
768 B
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