Everything is money unless it is not suitable to the Government

Everything is money until it has been rejected by the Government.

The Government assumes that bank deposits are as good as cash and so it provides deposit insurance. Deposit insurance results from the belief held by the Government that bank credit is as good as cash. The Government (apparently) doesn't have a problem with banks increasing the money supply, otherwise it would not provide deposit insurance. Deposit insurance means that the banks can increase the money supply. The Government doesn't care that banks are allowed to inflate the currency, it considers deposit insurance to be more important. We can have either a stable money supply or deposit insurance, not both.

With deposit insurance there is no disincentive against inflationary lending. Without deposit insurance fractional reserve banking (FRB) would be difficult, the insurance makes it much easier.

It's easy for the banks to operate in the way that they do because of deposit insurance, the insurance makes it easy for them.

If taxation exists, we must assume that everything is money until it has been rejected by the Government, we do not know what they will take, and they still take (have not rejected yet) bank deposits. Bank credit is (still) money (of interest to the Government, the holders not being punished) until the Government say otherwise and withdraw the guarantee of deposits. Until the Government guarantee is revoked, bank deposits will remain no less valuable than cash.

In a fiat economy money is whatever is not rejected by the Government, for taxes, and so bank deposits (and lots of other things) are money until they have been rejected. It is the opinion of the Government which affects the value of bank deposits, not that of individuals, and as a result of deposit insurance we can say that deposits are (a form of) money.