Many mistakenly believe that this is also the case with traditional currencies, the FIAT money. In fact, the money in a checking account is only a claim on the bank.
When a bank wants to loan out 100,000 US-Dollar or Euro to a customer, with a minimum reserve ratio of, for example, 1 per cent, the bank needs to deposit only 1,000 US-Dollar or Euro of customer money in their own account with the Central Bank to restock their reserve balance, and then just provide him with a corresponding balance in his current account. 1,000 have become 100,000. There has been a money creation without any real value. Due to the customer’s lending rates this unsubstantial amount expands even further.