Degen

3：
Once people in both regions A and B widely accept your deposit services and start using your notes for transactions, your notes effectively become paper currency. As other people imitate your model and open banks to issue their own notes, the market becomes flooded with a variety of paper currencies. When all the banks agree to standardize the design of these notes and form a unified ledger, the central bank is born. If this process is privately driven, the central bank is privately owned, such as the Federal Reserve in the U.S. If the state intervenes, it creates a national central bank, like the People’s Bank of China. But we’re getting ahead of ourselves. Let’s return to our previous point.

Now that your bank has accumulated a large amount of funds, you’re finally rich enough to lend money and earn interest. You pay part of the interest to those with fixed deposits, and the difference between the interest on deposits and loans becomes your profit.