This sentence means that foreign currency is money, local currency is money, and money is a certificate of creditor's rights and debts.

This is the function of money, there is no difference.

So how to understand? As far as dollars are concerned, your holding of dollars is your financial asset and a creditor's right to the US government. You can change it into other currencies you want through the bank (the bank submits the exchange to the Federal Bank of America through its own central bank, and the Federal Bank of America puts the corresponding gold into its underground vault). If you don't exchange it, the US government will hold the debt for you.

Local currency means that the domestic government has this debt with you. You owe this to your own government, but people don't think so at ordinary times.