This account is rife with inaccuracies. For instance, if fractional reserve banking operated as described here, no additional money would be created because the only money being lent would be money that already existed. In reality, if the fractional reserve is 20%, a bank must have in the vault a minimum of 20% of the amount of the loans it generates: for every dollar a bank has on hand it can lend up to five times that amount. That is how lending 'creates money out of thin air’.

For an accurate account there is, e.g., "How Money (i.e. Legal Tender) Gets Created in Out Nation (the U.S.)" here in Medium.