Part 2/10:
Types of Money
In any given country, there traditionally exist two principal types of money: central bank money and private bank money. Central bank money includes cash in circulation and reserves held by commercial banks at the central bank. Conversely, private bank money is represented by deposits made by individuals at banks. This dual structure means that transactions between individuals often depend on these deposits, while ultimate settlements occur via central bank money.
Settlement Mechanisms
There are two key settlement mechanisms: Real-time Gross Settlement (RTGS) and Batch Net Settlement.