Regarding the specific definition of M1, you'll have to research. I'm not a banker or an economist, I'm just remembering a macro econ course from 10 years ago.

Regarding the specific definition of M1, you'll have to research. I'm not a banker or an economist, I'm just remembering a macro econ course from 10 years ago. It's entirely possible that the US Federal Reserve Bank has a different definition of M1 than the People's Bank of China. Money has always been fungible, even nonfiat money. The second you have lenders in society and allow them to back loans using deposits, they effectively create money. The ratio of loans to deposits is called the cash reserve ratio, and it's pretty heavily regulated. As for the trust question, the answer is in your question. Swift and other interbank settlement systems are independent (or co-owner) organizations that require a massive security deposit to explicitly handle the situation where a bank says "transfer 1000 to A with account with us from account B in your bank" where the transfer wasn't backed or authorized or anything like that. It's important to note that there are both pull and push systems. ACH is an example of a system that can pull. All of this is because banks don't trust each other especially if they aren't beholden to the same regulatory authority.