The liability of a bank to its customer, which can be used as a medium of exchange in the economy.
The validity of the term “credit money” has been questioned by other schools of thought. Clearer distinctions between money, credit and debt can be made based on international accounting standards and legal definitions. Alternately, Modern Monetary Theory posits that all money a form of debt, and therefore the term “credit money” lacks conceptual clarity.
For further reading, we recommend our main articles on the Origin Of Money and Modern Monetary Theory.
The Origin of Money
Modern Monetary Theory