How does $20,000 in Cash actually move and where does it end up?

Can someone please explain this to me in plain English? I need a step-by-step, visual breakdown of how "PAPER" money—not just digital numbers on a screen—actually moves from one bank to another.

For example,

Let’s say I receive $20,000 in my US bank account from a Bank of England branch.
The amount doesn't matter, and the origin doesn't matter either; it could be $100,000 coming all the way from Chile.

I just don't get it. I need someone to draw me a map or tell me a story about the actual journey this money takes.

How does that $20,000 PHYSICALLY arrive here in the States from England or Chile?
(Are we talking carrier pigeons, airplanes, the postal service, or armored trucks?)🤷>
In other words,

Does a bank account in Chile suddenly have $20,000 less because that Cash is now sitting under my mattress?
What I want to know is: how does that bank in Chile actually collect that $20,000 from my bank?
Look, I'm not an idiot. I know about letters, faxes, money orders, SWIFT, checks,
and encrypted emails.
But I'm asking about the movement of physical CASH through the world.

And what happens when we're talking about $1 million in cash?🤷

Only about 3% of the world's money exists as physical paper currency. Everything else is purely digital. This wealth doesn't travel in paper form; it moves through electronic transfers.

Gregory Williams7 said:Only about 3% of the world's money exists as physical paper currency. Everything else is purely digital. This wealth doesn't travel in paper form; it moves through electronic transfers.

So what you're saying is a random bank in Chile could have an digital deficit of 20,000 US Dollars

while I’ve got those same 20,000 US Dollars sitting in my sock as physical, colorful bills?🙂

It makes you wonder who's actually stopping some bank director or even a low-level clerk
from just transferring 10,000 electronic US Dollars into their own "private" account.

There's gotta be massive holes in the system where money leaks out to the people
who actually know how to hold the digital sieve together.😲

What I’m actually curious about is what would happen if we all collectively decided to pull our money out at the exact same moment...

So, picture this: your aunt decides to wire you some cash all the way from the United Kingdom to the US. She drops the money into her account at Bank of America, while you’re sitting there with your own account over at Chase.
Since Bank of America doesn't have a direct link to Chase, they'd essentially move those funds—electronically, obviously—to a third bank, say one based in Germany. Then, that German bank transfers the amount to Chase, and Chase finally lands it in your account. It's all just digital handshakes.
Make sense?

neonhound10 said:What I’m actually curious about is what would happen if we all collectively decided to pull our money out at the exact same moment...

In that scenario, banks would basically be scrambling to call in every single loan they've handed out just to scrape together enough liquid cash to pay everyone back.

neonhound10 said:What I’m actually curious about is what would happen if we all collectively decided to pull our money out at the exact same moment...

The world would collapse! And I mean literally 😉

I’ve been giving this a bit more thought lately... and if my logic holds up, money like this can really only move through affiliated banks. You'd likely see a transfer from the Austrian Central Bank over to a major US bank like Chase, probably with a hefty commission attached to the deal along the way...

Of course, there are also those wire transfer services like Western Union where you end up paying high fees, though those operate on a different model since they rely on their own physical branch networks...

But hey, I'm sure there are plenty of brilliant economists out there who understand exactly how these global flows work. Looking back, once the US moved away from the gold standard in the 1970s, money lost its true intrinsic value... Nowadays, everything just feels like a collection of ones and zeros sitting in some digital database...

electricsailor13 said:The world would collapse! And I mean literally 😉

I don't think it would actually collapse, though things would definitely get pretty messy...

In general, the whole economy has just spiraled out of control lately, which explains why everything feels so chaotic right now...

It used to be that the economy provided a solid foundation and clear rules for everyone to follow, but nowadays, it’s more like this massive, floating monster created by Frankenstein that just wreaks havoc on everything in its path...

How could that even work? Where would we get enough physical paper to cover 97% of all electronic transactions? Where’s the ink coming from? And where would we find the time to pay everyone at once?

That sounds like a disaster movie script straight out of a sequel to "2012." 😁

electricsailor13 said:How could that even work? Where would we get enough physical paper to cover 97% of all electronic transactions? Where’s the ink coming from? And where would we find the time to pay everyone at once?

That sounds like a disaster movie script straight out of a sequel to "2012." 😁

Look, if we actually start making deals today, we might just have that movie finished before the world actually ends...😬

neonhound10 said:I’ve been giving this a bit more thought lately... and if my logic holds up, money like this can really only move through affiliated banks. You'd likely see a transfer from the Austrian Central Bank over to a major US bank like Chase, probably with a hefty commission attached to the deal along the way...

Of course, there are also those wire transfer services like Western Union where you end up paying high fees, though those operate on a different model since they rely on their own physical branch networks...

But hey, I'm sure there are plenty of brilliant economists out there who understand exactly how these global flows work. Looking back, once the US moved away from the gold standard in the 1970s, money lost its true intrinsic value... Nowadays, everything just feels like a collection of ones and zeros sitting in some digital database...

Actually, the term you're looking for is "correspondent banking," which basically just means one bank holds an account with another. If the bank you're sending from doesn't have that kind of setup with the destination bank, they have to go through an intermediary that's connected to both. Sometimes the cash ends up bouncing through several different banks—and yeah, every single stop along the way takes its little slice of the pie.
The whole banking group thing doesn't really change that. You could send money from Chase straight to the Austrian Central Bank without any drama.

Terry Howard said:Actually, the term you're looking for is "correspondent banking," which basically just means one bank holds an account with another. If the bank you're sending from doesn't have that kind of setup with the destination bank, they have to go through an intermediary that's connected to both. Sometimes the cash ends up bouncing through several different banks—and yeah, every single stop along the way takes its little slice of the pie.
The whole banking group thing doesn't really change that. You could send money from Chase straight to the Austrian Central Bank without any drama.

That’s exactly what I was getting at... there really has to be some kind of connected chain of events tying all of this together...

Of course you can do that, and from the user's perspective, everything will look exactly right, though when you actually dive into the fine print, the details will end up looking just like what you mentioned... 👍