What Is a Federal Reserve Note?

By Mick Travis , last updated September 16, 2011

A Federal Reserve Note is essentially the official paper currency of the United States. Federal reserve notes, or dollar bills, are printed by the U.S. Treasury under the instruction of Federal Reserve member banks. These banks also serve as a clearinghouse for smaller, local banks where checks and bills are exchanged in order to appropriately adjust the cash on hand at these local banks. Federal reserve notes should not be confused with Federal Reserve Bank Notes, which were only issued to individual Federal Reserve member banks, and which were eliminated in the 1930s.

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