This new centre will support the New York cashMoney in physical form such as banknotes and coins. More processing services and operations, including the circulation of US notes and coins within the Second District and abroad. The Second District includes New York state, the 12 northern counties of New Jersey, Connecticut, Puerto Rico and the US Virgin Islands and, although it serves a geographically small area compared with those of other 11 Federal Reserve Banks, the FRBNY is the largest in terms of assets and volume of activity.
The FRBNY’s unique responsibilities include acting as the primary contact with foreign central banks and undertaking the distribution of US currencyThe money used in a particular country at a particular time, like dollar, yen, euro, etc., consisting of banknotes and coins, that does not require endorsement as a medium of exchange. More overseas (60% of all US currency circulates abroad).
This includes the Foreign Bank International Cash Services (FBICS) program, which it runs on behalf of the Fed. The program, introduced in 2018, permits foreign banks and/or their parents of affiliates (wholesale banknoteA banknote (or ‘bill’ as it is often referred to in the US) is a type of negotiable promissory note, issued by a bank or other licensed authority, payable to the bearer on demand. More entities) that do not have a presence in the US to open limited purpose accounts with the FRBNY and use those accounts to access Federal Reserve BankSee Central bank. More currency services, such as the ability to place orders on a same-day basis, to have currency orders fulfilled solely with new banknotes (as opposed to previously circulated banknotes), to deposit US currency and to receive expedited processing of large-denomination banknotes deposited with the FRBNY.
The FRBNY also runs the Federal Reserve’s Extended Custodial Inventory (ECI) program. Under this, it contracts with overseas deposit institutions (DIs) to maintain inventories of FRBNY-owned banknotes
in the DIs’ vaults located in strategic distribution centres outside of the US. The ECI program is designed to help satisfy wholesale demand for US banknotes in multiple jurisdictions or regions and facilitate the introduction of new design banknotes, the repatriation of older-design banknotes, and the circulation of fit banknotes overseas.
The FRBNY has stated that the new centre will enable it to facilitate more efficient cash processing and maintain a high level of resiliency. The building will measure around 350,000 sq ft over three stories. A site in Warren, NJ, has been selected, and the FRBNY is in the process of obtaining the relevant local approvals.