You are making the classic mistake of confusing currency with money. Only approximately 8.3% of the U.S. money supply, it’s liquidity, is in the form of paper currency and coinage. Currency and coin are a small subset of money. The rest exist in magnetic or optical or electronic storage methods . . . or even paper entries on books as accounting balances. Even those forms of money have been, at some point, lent into existence as a consequence of the reserve system of banking which allows banks to create money over the amount they actually have on deposit. They are required to maintain a reserve of liquid money on hand to meet cash demand for depositors’ needs but some of that can be electronic these days which can be wired or issued as a cashier’s check in digital, non-cash form. For flexibility, they can also reach out to a pooled cash reserve account at either the Federal Reserve Bank, or an adjunct bank.
No, I'm really not. And we're talking about new currency getting to banks.
They are required to maintain a reserve of liquid money on hand to meet cash demand for depositors’ needs but some of that can be electronic these days which can be wired or issued as a cashier’s check in digital, non-cash form.
Yes, bank reserves include balances at the Fed and vault cash.