You've had a few answers about the use of central bank accounts; i'll note that this process is called net settlement: https://en.wikipedia.org/wiki/Net_settle

You've had a few answers about the use of central bank accounts; i'll note that this process is called net settlement: https://en.wikipedia.org/wiki/Net_settlement https://en.wikipedia.org/wiki/Net_settlement There is also a technique involving things called nostro/vostro accounts, where banks have money on deposit with each other, and the sending bank's deposit with the receiving bank is used to cover transfers: https://en.wikipedia.org/wiki/Nostro_and_vostro_accounts https://en.wikipedia.org/wiki/Nostro_and_vostro_accounts Of course, then they need to keep their accounts topped up, and they can do that by transfers through other banks, which might be central banks or commercial ones. The nostro/vostro system is suitable for use where banks don't trust each other so much, eg because they are in different countries. I think it was used more in the past, before reliable central settlement schemes were established, but i'm not sure. You can think of net settlement as being a bit like nostro/vostro where the accounts have infinite free overdraft facilities, and so the banks never build up a credit balance, and just settle their debts at the end of the day.