commercial banks have to get the fresh cash to lend from central banks but with only fractional reserves overall. Even the FHLBs must get cash from a Fed bank.
Discussion
If a commercial just lends against its assets, say treasuries, then it creates money. Are you saying that commercials are *coerced* into holding deposits at the Fed, in exchange for “cash”?
I believe commercial banks must borrow cash from Fed to close a loan and disburse funds with previously created fiat money, including claims on collateral which has fiat money available if sold as part of fractional banking leverage. They buy and deposit Treasuries with the a Fed bank to get secured and lower cash borrowing rates then anywhere else