Editing Federal Reserve Note (section)

{{Short description|Paper currency of the United States}}
{{Distinguish|Federal Reserve Bank Note}}
{{Use mdy dates|date=April 2024}}
{{Use American English|date=March 2025}}
[[File:US_one_dollar_bill,_obverse,_series_2009.jpg|thumb|300px|A [[United States one-dollar bill|one-dollar bill]], the most common Federal Reserve Note ]]
'''Federal Reserve Notes''' are the currently issued [[banknotes of the United States dollar]].<ref>{{cite book|last1=O'Sullivan|first1=Arthur|author-link=Arthur O'Sullivan (economist)|first2=Steven M.|last2=Sheffrin|author-link2=Steven M. Sheffrin|title=Economics: Principles in Action|publisher=Pearson Prentice Hall|year=2003|location=Upper Saddle River, N.J.|page=255|isbn=0-13-063085-3}}</ref> The United States [[Bureau of Engraving and Printing]] produces the notes under the authority of the [[Federal Reserve Act of 1913]]<ref name="Section 411">{{USC|12|411}}</ref> and issues them to the [[Federal Reserve Bank]]s at the discretion of the [[Federal Reserve Board of Governors|Board of Governors]] of the [[Federal Reserve System]].<ref name="Section 411"/> The Reserve Banks then circulate the notes to their member banks,<ref>[[Bryan A. Garner]], editor, ''Black's Law Dictionary'' 8th ed. (West Group, 2004) {{ISBN|0-314-15199-0}}.</ref> at which point they become liabilities of the Reserve Banks<ref>{{USC|12|415}} Section 415 describes circulating Federal Reserve Notes as ''liabilities'' of the issuing Federal Reserve Bank.</ref> and obligations of the United States.<ref name="Section 411"/>

Federal Reserve Notes are [[legal tender]], with the words "this note is legal tender for all debts, public and private" printed on each note.<ref>{{USC|31|5103}}</ref> The notes are backed by financial assets that the Federal Reserve Banks pledge as collateral, which are mainly [[United States Treasury security|Treasury securities]] and [[agency security|mortgage agency securities]]<ref>See weekly [https://www.federalreserve.gov/releases/h41/ H.4.1 reports], "Collateral Held against Federal Reserve Notes"</ref> that they purchase on the open market by [[fiat money|fiat payment]].