Follow-up question: does M1 include funds that are digitally issued from a central to a private bank, such as loans from the Fed to (for example) Wells Fargo? If so, are these funds considered fungible for purposes of digital transfer, such as via the SWIFT Network, or does each dollar / unit of currency have some notion of a traceable serial number as for physical bills?
I guess what I'm asking is less a finance question, and more a software question. If a bank in China (or the U.S., or anywhere) sends a SWIFT message of deposit to another bank, to what extent can the recipient verify the chain of trust in the funds' existence all the way back to the central issuing authority? If they cannot, it would seem that any private bank could de facto "print money" central bank-style by issuing fraudulent SWIFT requests. Perhaps they'd get caught, or maybe not, if they colluded with the relevant authorities.