Federal Reserve Note

A Federal Reserve Note, also a United States banknote or U.S. banknote, is a type of banknote used in the United States of America. Denominated in United States dollars, Federal Reserve Notes are printed by the United States Bureau of Engraving and Printing on paper made by Crane & Co. of Dalton, Massachusetts. They are the only type of U.S. banknote produced as of 2012. They are distinct from Federal Reserve Bank Notes, each of which was issued (until 1971) and backed by one, rather than all collectively, of the twelve Federal Reserve Banks.

Federal Reserve Notes are authorized by Section 411 of Title 12 of the United States Code and are issued to the Federal Reserve Banks at the discretion of the Board of Governors of the Federal Reserve System. The notes are then put into circulation by the Federal Reserve Banks, at which point they become liabilities of the Federal Reserve Banks and obligations of the United States.

Federal Reserve Notes are legal tender, with the words "this note is legal tender for all debts, public and private" printed on each note. (See generally 31 U.S.C. ยง 5103.) They have replaced United States Notes, which were once issued by the Treasury Department. Federal Reserve Notes are backed by the assets of the Federal Reserve Banks, which serve as collateral under Federal Reserve Act Section 16. These assets are generally Treasury securities which have been purchased by the Federal Reserve through its Federal Open Market Committee in a process called debt monetizing. (See Monetization.) This monetized debt can increase the money supply, either with the issuance of new Federal Reserve Notes or with the creation of debt money (deposits). This increase in the monetary base leads to larger increase in the money supply through the fractional-reserve banking as deposits are lent and re-deposited where they form the basis of further loans.

Read more about Federal Reserve Note:  History, Value, Production and Distribution, Nicknames, Design Regulations

Other articles related to "federal reserve note, federal reserve, notes, federal reserve notes, note":

Cnote - Small Size Note History
... The $100 bill was issued as a Federal Reserve Note with a green seal and serial numbers and as a Gold Certificate with a golden seal and serial numbers ... was pumped into the American economy through Federal Reserve Bank Notes issued under Series of 1929 ... in gold clause was removed from Federal Reserve Notes due to the U.S ...
Large Denominations Of United States Currency - $5,000 Bill
... There is a large-sized $5,000 Federal Reserve Note on display at the Smithsonian Museum of American History ... The $5,000 bill was printed as a gold certificate in 1928, and a federal reserve note in 1928, 1934, and 1934A ... Series 1878 $5,000 United States Note, Reverse Series 1918 $5,000 Federal Reserve Note, Reverse, featuring the resignation of General George Washington Series 1934 $5,000 Federal Reserve Note, Reverse ...
Federal Reserve Note - Series Detail - Post-2004 Redesigned Series
... Beginning in 2003, the Federal Reserve introduced a new series of bills, featuring images of national symbols of freedom ...

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