The answer:
Less than 10% is cash, which is printed by National or Central banks.
But most of our money is “digital money” in the form of numbers on bank accounts. This money is created when somebody takes a loan.
Yes, that is really true.
The Banker in Happy Nation works in the same way: The money for a loan comes not from the Banker, but is taken from the supply. When paying back a loan this money goes back to the supply, it disapears again. Only the interest is going to the banker.
The Bank of England states it very clearly on their webpage:
“Most of the money in the economy is created by banks when they provide loans.”
The European Central Bank is also providing this info:
“How is money created?
Commercial banks can also create so-called “inside” money, i.e. bank deposits – this happens every time they issue a new loan.”
If you want to know more and get it explained in a video with graphics, then try this page:
The Banking 101 video course from positivemoney.org.