Fractional reserve banking still works with dollar bills (and did for hundreds of years). It even works with gold. Customer 1 deposits ten dollar bills. Bank re

Fractional reserve banking still works with dollar bills (and did for hundreds of years). It even works with gold. Customer 1 deposits ten dollar bills. Bank records it in their ledger. Bank then lends five of those bills to customer 2. Now there's an extra $5 in the money supply, because the deposit in cutomer 1's account counts as money, and the $5 lent to customer 2 also counts as money. Nobody is any richer, as customer 2 owes the $5 to the bank, and the bank owes the $5 to customer 1, but there's an extra $5 in circulation. No printing required.