'In 1694, a consortium of English bankers made a loan of £1,200,000 to the king. In return, they recieved a royal monopoly on the issuance of banknotes. What this meant in practice was that they had the right ot advance IOUs for a portion of the money the king now owed them to any inhabitant of the kingdom willing to borrow from them, or willing to deposit their own money in the bank — in effect, to circulate or "monetize" the newly created royal debt.
This was a great deal for the bankers (they got to charge the king 8 percent annual interest for the original loan and simultaneously charge interest on the same money to the clients who borrowed it), but it only worked as long as the original loan remained outstanding. To this day, this loan has never been paid back. It cannot be. If it ever were, the entire monetary system of Great Britain would cease to exist.*
(*It is also interesting to note, in this regard, that the Bank of England still kept their own internal accounts using tally sticks in Adam Smith's time, and only abandoned the practice in 1826.)'
— David Graeber, Debt: The First 5000 Years (2011), p. 49.