Informing the public about the Federal Reserve
What is the role of the Federal Reserve with respect to banknotes and coins?
The Board of Governors of the Federal Reserve System is the issuing authority for Federal Reserve notes, the primary form of currency in circulation in the United States. The Board has a wide range of responsibilities related to Federal Reserve notes, from ensuring an adequate supply to protecting and maintaining confidence in U.S. currency.
The 12 regional Federal Reserve Banks, through their network of Districts and branches throughout the country, distribute Federal Reserve notes to the public through depository institutions. Reserve Banks process notes on high-speed sorting machines that check to ensure that they are genuine and fit for recirculation. If the notes are not genuine, Reserve Banks forward them to the local U.S. Secret Service office. If they are genuine and still in good condition, the notes are sent to depository institutions to fill new orders for currency. An individual note continues moving through this cycle until it is deemed unfit, or too worn, to be kept in circulation. Unfit notes are destroyed on-site at Reserve Banks in order to maintain the quality of currency in circulation.
The Board's role in coin operations is more limited than its role in cash operations, as the United States Mint is the issuing authority for coins. Reserve Banks distribute new and circulated coin to depository institutions to meet the public's demand, and take as deposits coin that exceeds the public's needs.