What was the preceding phase, where the Fed created new reserves that were not subtracted from anyone's balance sheet?

I was thinking it's like Asset Intermediation, but that appears twice and if A is reserves in one, B had to be reserves in the other?

As for novation, why must the Fed deduct reserves? Can the Fed issue new CBDC accounts and pay inflation as interest on them to set monetary policy by encouraging savings on an individual level? (Analogous to paying banks interest on reserves so they don't undercut the Fed Funds rate?)

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