United States dollar

The United States dollar, or the American dollar, is the official currency, or money, of the United States of America and is also used in a number of other countries outside the US. It is also the standard currency for international markets selling goods such as gold and oil (petrol). When writing, the symbol for the American dollar is the dollar sign ($). Dollars can also be known as USD (U.S. Dollar).

Front of a US dollar bill

The American one dollar bill has a picture of George Washington. There are currently paper bills (currency) of 1, 2, 5, 10, 20, 50, and 100 dollars.

All U.S. dollar currency has been the same size since 1928, unlike some countries where bank notes, or pieces of paper money, with different values have different sizes.

The U.S. also has dollar coins. Some are silver colored and some are gold colored. Vending machines often give dollar coins as change, since it is easier for the machines to give out coins than paper money. Some of the more advanced vending machines give out paper money as change. Paper dollars are much more common than dollar coins.

The US dollar in subdivided into cents, and 100 cents equals 1 US dollar. One cent can be written as either $0.01 or 1¢. The cent or "penny" (not to be confused with the English penny sterling) is the least worth coin used in the U.S.. There are several different coins with different cent values of different materials and sizes. There is the penny (1¢ or $0.01), nickel (5¢ or $0.05), dime (10¢ or $0.10), quarter (25¢ or $0.25), and the much rarer half-dollar (50¢ or $0.50).[1] All coins and paper bills have the faces of famous Americans on the front side.

The paper "dollar bill" is actually called a "Federal Reserve Note". Federal Reserve notes are legal tender currency notes. The twelve Federal Reserve Banks issue them into circulation pursuant to the Federal Reserve Act of 1913. A commercial bank belonging to the Federal Reserve System can obtain Federal Reserve notes from the Federal Reserve Bank in its district whenever it wishes by paying for them in full, dollar for dollar, from its account with Federal Reserve Bank.

Federal Reserve Banks obtain the notes from the U.S. Bureau of Engraving and Printing (BEP). It pays the BEP for the cost of producing the notes, which then become liabilities of the Federal Reserve Banks, and obligations of the United States Government.

Congress has specified that a Federal Reserve Bank must hold collateral equal in value to the Federal Reserve notes that the Bank receives. This collateral is chiefly gold certificates and United States securities. This provides backing for the note issue. The idea was that if the Congress dissolved the Federal Reserve System, the United States would take over the notes (liabilities). This would meet the requirements of Section 411, but the government would also take over the assets, which would be of equal value. Federal Reserve notes represent a first lien on all the assets of the Federal Reserve Banks, and on the collateral specifically held against them.

Federal Reserve notes are not redeemable in gold, silver or any other commodity, and receive no backing by anything. This has been the case since 1933. The notes have no value for themselves, but for what they will buy. In another sense, because they are legal tender, Federal Reserve notes are "backed" by all the goods and services in the economy.

The Coinage Act of 1965, specifically Section 31 U.S.C. 5103, entitled "Legal tender," which states: "United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues."

This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. For example, a bus line may prohibit payment of fares in pennies or dollar bills. In addition, movie theaters, convenience stores and gas stations may refuse to accept large denomination currency (usually notes above $20) as a matter of policy.[2]

Meeting the Variable Demand for Cash

The public typically obtains its cash from banks by withdrawing cash from automated teller machines (ATMs) or by cashing checks. The amount of cash that the public holds varies seasonally, by the day of the month, and even by the day of the week. For example, people demand a large amount of cash for shopping and vacations during the year-end holiday season. Also, people typically withdraw cash at ATMs over the weekend, so there is more cash in circulation on Monday than on Friday.

To meet the demands of their customers, banks get cash from Federal Reserve Banks. Most medium- and large-sized banks maintain reserve accounts at one of the 12 regional Federal Reserve Banks, and they pay for the cash they get from the Fed by having those accounts debited. Some smaller banks maintain their required reserves at larger, "correspondent," banks. The smaller banks get cash through the correspondent banks, which charge a fee for the service. The larger banks get currency from the Fed and pass it on to the smaller banks.

When the public's demand for cash declines—after the holiday season, for example—banks find they have more cash than they need and they deposit the excess at the Fed. Because banks pay the Fed for cash by having their reserve accounts debited, the level of reserves in the nation's banking system drops when the public's demand for cash rises; similarly, the level rises again when the public's demand for cash subsides and banks ship cash back to the Fed. The Fed offsets variations in the public's demand for cash that could introduce volatility into credit markets by implementing open market operations.

The popularization of the ATM in recent years has increased the public's demand for currency and, in turn, the amount of currency that banks order from the Fed. Interestingly, the advent of the ATM has led some banks to request used, fit bills, rather than new bills, because the used bills often work better in the ATMs.

Other Languages
Адыгэбзэ: АШЗ-м и доллар
Alemannisch: US-Dollar
العربية: دولار أمريكي
Avañe'ẽ: Dólar
azərbaycanca: ABŞ dolları
Bân-lâm-gú: Bí-kim
башҡортса: АҠШ доллары
беларуская: Долар ЗША
беларуская (тарашкевіца)‎: Амэрыканскі даляр
भोजपुरी: अमेरिकी डालर
български: Щатски долар
Boarisch: US-Dollar
bosanski: Američki dolar
Чӑвашла: АПШ долларĕ
čeština: Americký dolar
davvisámegiella: USA dollár
Deutsch: US-Dollar
eesti: USA dollar
Ελληνικά: Δολάριο ΗΠΑ
Esperanto: Usona dolaro
贛語: 美金
客家語/Hak-kâ-ngî: Mî-kîm
한국어: 미국 달러
հայերեն: ԱՄՆ դոլար
hrvatski: Američki dolar
বিষ্ণুপ্রিয়া মণিপুরী: ইউ এস ডলার
Bahasa Indonesia: Dolar Amerika Serikat
interlingua: Dollar statounitese
isiZulu: IDola
íslenska: Bandaríkjadalur
Jawa: Dolar AS
къарачай-малкъар: АБШ-ны доллары
қазақша: АҚШ доллары
Кыргызча: АКШ доллары
latviešu: ASV dolārs
Lëtzebuergesch: US-Dollar
македонски: Американски долар
Māori: USD
Bahasa Melayu: Dolar Amerika Syarikat
Mìng-dĕ̤ng-ngṳ̄: Mī-gĭng
Mirandés: Dólar amaricano
မြန်မာဘာသာ: အမေရိကန်ဒေါ်လာ
Nederlands: Amerikaanse dollar
нохчийн: АЦШ доллар
Nordfriisk: US-Dooler
norsk nynorsk: US-dollar
oʻzbekcha/ўзбекча: AQSh dollari
پنجابی: امریکی ڈالر
Plattdüütsch: US-Dollar
română: Dolar american
rumantsch: Dollar american
Runa Simi: Amirikanu dollar
русиньскый: США долар
русский: Доллар США
саха тыла: АХШ дуоллара
slovenčina: Americký dolár
slovenščina: Ameriški dolar
словѣньскъ / ⰔⰎⰑⰂⰡⰐⰠⰔⰍⰟ: Амєрїканьскъ доларъ
српски / srpski: Амерички долар
srpskohrvatski / српскохрватски: Američki dolar
татарча/tatarça: АКШ доллары
тоҷикӣ: Доллари ИМА
Türkmençe: Dollar
українська: Долар США
ئۇيغۇرچە / Uyghurche: ئامېرىكا دولىرى
vepsän kel’: AÜV:oiden dollar
Tiếng Việt: Đô la Mỹ
文言: 美金
吴语: 美圓
粵語: 美金
žemaitėška: JAV duoleris
中文: 美元
kriyòl gwiyannen: Dollar amériken