When governments make transactions, how do they pay? By physically sending all that cash or by using credit etc.
Depends on who they’re paying.
Other governments – usually by electronic transfers. Or by telling the workers in the gold depository to move a brick or two from the USA shelf to country X’s shelf.
International businesses – also mostly by electronic transfers, though sometimes they will send an actual physical check.
Small foreign businesses – often the local embassy has an account at a local bank, and payment is made via a check or funds transfer from that account.
Individual persons in a foreign country – again, often paid via a local bank. But sometimes in areas where there is no functioning local financial system (or where the government payments are intended to be kept secret, like bribes, etc.) they are paid in actual cash. Mainly US dollars by our government. There were news reports of pallet-loads of US cash currency shipped to Iraq for this (much of it seems to have disappeared without a trace as far as financial records).
Wasn’t the amount around the 12 billion mark?