-8-  money held in deposits at commercial banks—is widely used because consumers and businesses trust that the money they deposit with a commercial bank can be converted, on demand, into a claim on another commercial bank’s money or currency. This confidence owes in large part to bank deposit insurance and the fact that commercial banks are supervised and regulated.
Nonbank private money based on the U.S. dollar as the unit of account exists on a smaller scale for a variety of consumer uses, particularly in closed-loop payment systems like prepaid cards and digital wallets.