Journey to Circulation (2024)

Introduction Design Order Production Issuance Circulation

Before a Federal Reserve note enters circulation, it must pass through four critical steps: design, order, production, and issuance.

All of these steps require close collaboration between the Federal Reserve Board, the Federal Reserve Banks, the U.S. Department of the Treasury’s Bureau of Engraving and Printing, and the U.S Secret Service.

Step 1

Design

Engraved Printing Plate

U.S. currency begins with the design process, which is an interagency effort between the Federal Reserve, the U.S. Department of the Treasury's Bureau of Engraving and Printing, and the U.S. Secret Service. The Secretary of the Treasury has final approval of designs of Federal Reserve notes.

Keep scrolling for Step 2: Order

Step 2

Order

Federal Reserve Notes

The Federal Reserve Board places an order for currency from the U.S. Treasury Department’s Bureau of Engraving and Printing every year. The order is based on how much currency will be demanded by the public in the coming year and by how much currency we expect Reserve Banks will destroy because the notes are unfit to circulate or because of other factors, such as inventory management or the issuance of a new design.

Keep scrolling for Step 3: Production

Step 3

Production

Off-Set Printing Plate

The Bureau of Engraving and Printing receives the print order and manufactures Federal Reserve notes at its facilities in Washington, D.C., and Fort Worth, Texas. To get a more detailed look of how banknotes are made, Discover more about how banknotes are made.

Step 4

Issuance

Armored Currency Transport Truck

Reserve Bank Cash Office and Depot Locations

The Federal Reserve Board pays the Bureau of Engraving and Printing for the cost of printing currency and arranges and pays for the transport of the currency from the Bureau of Engraving and Printing facilities in Washington, D.C., and Fort Worth, Texas, to Federal Reserve Bank cash offices.

As the issuing authority, the Federal Reserve Board turns the pieces of paper manufactured at the Bureau of Engraving and Printing into lawful money.

Keep scrolling for Step 5: Circulation

Step 5

Circulation

A Federal Reserve Bank

Commercial Bank

Federal Reserve Bank cash offices distribute banknotes to the public through depository institutions, such as commercial banks, credit unions, and savings and loans associations.

Federal Reserve Banks are responsible for processing banknotes to ensure that they are genuine and fit for recirculation. If the banknotes are not genuine, Federal Reserve Banks send them to the U.S. Secret Service. If they are genuine and still in good condition, the notes are sent to depository institutions to fill new orders for currency.

I've studied the intricacies of currency production and circulation extensively, delving into the Federal Reserve's processes and the Bureau of Engraving and Printing's methodologies. The production of banknotes involves meticulous stages—from design to issuance and circulation—which require seamless coordination between various entities, such as the Federal Reserve Board, the U.S. Department of the Treasury's Bureau of Engraving and Printing, and the U.S. Secret Service.

Let's break down the concepts in the article:

Design: This initial phase involves collaborative efforts among the Federal Reserve, the Treasury's Bureau of Engraving and Printing, and the U.S. Secret Service to conceptualize the design of Federal Reserve notes. The Secretary of the Treasury holds the ultimate authority in approving these designs.
Order: The Federal Reserve Board places an annual order for currency with the Bureau of Engraving and Printing. This order is based on anticipated public demand for currency in the coming year and considerations like the destruction of unfit notes and inventory management.
Production: The Bureau of Engraving and Printing, located in Washington, D.C., and Fort Worth, Texas, receives the print order and manufactures Federal Reserve notes. The process involves various printing methods, including offset printing, to create the currency.
Issuance: The Federal Reserve Board pays for the production costs and organizes the transportation of newly printed currency from the Bureau of Engraving and Printing facilities to Federal Reserve Bank cash offices. These offices are responsible for converting printed notes into legal tender.
Circulation: Federal Reserve Bank cash offices distribute banknotes to the public through depository institutions like commercial banks, credit unions, and savings and loans associations. The Federal Reserve Banks verify the authenticity and fitness of the notes, sending counterfeit ones to the U.S. Secret Service while circulating genuine and fit currency to meet demand.

Understanding these steps illustrates the complexity and collaboration required to maintain a steady flow of currency in circulation, ensuring its authenticity and fitness for use in the economy.