Its through fractional reserve banking. As i understand it, effectivly a bank can lend the same dollar out multiple times by treating the debt of others as an asset that they can then loan out again.

Say you have a dollar and you deposit it with the bank. The bank treats your deposited dollar as their asset which it then can lend out multiple times. Each time it does this it counts each loan as a "new" asset(the debt of that loan) effectivly "printing" new dollars into existence. On top of that each dollar they lend is now owed back to them with interest.

This *only* works as long as there is enough time in-between deposits and withdrawals for the bank to remain *solvent* on paper. Its only when every depositors wants to withdrawal all their money all at once that the system breaks and a bank run happens.