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Journey of a US banknote

Categories : Cash is efficient
August 16, 2016
Tags : Banknotes, Cash cycle efficiency, Central Bank, US
Banknotes pass through different stages before being dispensed by the cash machine, involving various key players.
Communication Team / Equipo de Comunicación

You may certainly be aware that banknotes are issued by central banks, but do you know the different stages that they must go through before being dispensed by the cash machine? They can roughly be divided into five steps: design, order, production, issuance and circulation, each of which depends on distinct key players. 

In the United States, banknotes are issued by the Federal Reserve, in collaboration with the Federal Reserve Board and Banks, the US Department Treasury’s Bureau of Engraving and Printing and the US Secret Service.

The design is elaborated jointly by the Federal Reserve, the Bureau of Engraving and Printing and the US Secret Service. Final approval of the Treasury Secretary is required to validate the future note. Every year, the Federal Reserve Board orders currency to the Bureau of Engraving. The asked volume is calculated according to the public’s demand for the coming years and also depends on how much currency is expected to be destroyed for unfitness or inventory management reasons by Reserve Banks. The production is then ensured by the Bureau of Engraving’s facilities, located in Washington D.C, Fort Worth and Texas. The manufacture of banknotes is a complex process including a great number of security features. If you want to know more about money making, please click here

The Federal Reserve Board organizes the transportation from the facilities to Federal Banks cash offices before finally turning the paper into legal tender. Banknotes are now ready to reach American wallets, and will be distributed to the public via commercial banks, credit unions and saving and loans associations. The notes will then pass from hand to hand until they are considered as unfit by the Federal Reserve Banks, which will destroy them. The US Secret Service takes part in the process if fake currency has been detected.

To read US Currency Education Program, click here.