Money does not have to be in the form of paper money and coins. The issuer no longer has to be the central bank. The following are some types of money that the people currently use.
Currency
Currency is money issued by a central bank and/or government, in the form of banknotes and coins. Although no longer guaranteed by gold and silver in their issuance, banknotes and coins are acceptable to the public. The central bank and/or government issue currency in an amount estimated to be sufficient to facilitate households and firms in transactions. As the economy develops, the need of households and firms for currency increases. Meanwhile, along with the development of banking and non-cash payments, the portion of currency circulating in the economy is decreasing.
Bank Money
In contrast to the perception of some people who think that money is issued only by the central bank and/or government, by now most of the money is actually issued by commercial banks (hereinafter referred to as banks). The central bank and/or the government issue money in the form of banknotes and coins, while banks issue money in the form of deposits in the banks, which arises when people deposit their money in the banks or obtain credits or financing from the banks. Bank money (money issued by the bank) is in the form of savings deposits, demand deposits, and time deposits. Demand deposits and most savings deposits can be withdrawn at any time, while time deposits cannot be withdrawn at any time because there are provisions for the period of withdrawal or disbursement. Demand deposits and savings deposits that can be withdrawn at any time are deposit money, while time deposits and savings deposits that cannot be withdrawn at any time are quasi-money.
Digital Money
By now, money has entered the next stage of development, that is digital money. There are some forms of digital money circulating in society, namely e-money (electronic money) and cryptocurrency. Electronic money is digital money issued by a firm to facilitate transactions in buying-selling and using public facilities. Users have to exchange currency or bank deposits to get the digital money. The money from the exchange of electronic money is stored in the banking system and used to settle transactions using the electronic money. As long as the money exchanged for electronic money is in the banking system and is not lent, the creation of electronic money does not increase the money supply.