Actually, that is pretty much exactly how it works. Banknotes (i.e. cash), are explicitly IOUs from a bank. Usually, it is a central bank, such as the Bank of E

Actually, that is pretty much exactly how it works. Banknotes (i.e. cash), are explicitly IOUs from a bank. Usually, it is a central bank, such as the Bank of England, but sometimes, it could be another bank. There are three retail banks in Scotland that are authorised to issue banknotes: https://en.m.wikipedia.org/wiki/Banknotes_of_Scotland https://en.m.wikipedia.org/wiki/Banknotes_of_Scotland