The point is that the funny thing with money is that money is money when enough people think it is money.  And when that happens, it is real, and the "dream world" becomes the real world, and the "real world" where "this is not money" becomes, eventually a dream.

There is no "objective", ontological reality to money: money is exactly a thing that is pure belief, but when it is pure belief, it is real.  If enough people accept sea shells as money, then sea shells are REALLY money, and the few people finding that ridiculous (which was the reality before) are now the ones deluding themselves, and living in a dream.

Even more: if deposit accounts telling you that you have sea shells are generally accepted as means of payment (even if there are no "real sea shells" behind it), then those deposit accounts have become real money, and those denying that are deluding themselves.  Even if there are no "real sea shells".

Credit money creation with deposit accounts is in fact unavoidable from the moment you allow for borrowing. 

Look at these scenario's.  Let us assume that sea shells are money.

1) We pay with sea shells.  The money is only base money.  The only way to borrow money is to find someone to lend them to you, and to write out a contract.   That's the financial equivalent of barter.

2) We use banks as vaults.  That is, we go to a bank, give them 100 sea shells, and we get a deposit account with 100 sea shells on it. The bank keeps the shells, and we pay one another with the deposit accounts.

This is in fact exactly the principle of John Law's central bank.  The fiat is now the deposit accounts, and every bank acts as a central bank, having 100% coverage of their deposits.  But


3) Banks can borrow money.  If someone comes to a bank, and borrows 80 sea shells (against a contract with the bank to pay back in due time 85 sea shells), then the bank will CREATE him a deposit account with 80 sea shells on it.
But the bank cannot remove 80 of the 100 shells from my account, because that deposit account tells exactly that the bank owes me 100 shells, which is still right.

But now there is 180 shells equivalent in deposit accounts (which was the de facto money now).

If a bank borrows money, credit money is created, and if the money is in fact deposit money (credit money) then that money creation is unavoidable and is part of the principle of borrowing money.

What in fact happened is that the contract "I will pay you back 85 shells" against the bank's IOU 80 shells, is in a way indistinguishable from the bank's IOU 100 shells of my deposit account.

When people consider IOU from a bank as money (that is, deposit accounts) money creation through borrowing is unavoidable.

You cannot stop people having confidence enough in banks to consider deposit accounts money.  Even if you (in your "dream world" ) are screaming that it is "not real".

It became real money, the day that people considered deposits as money.