Fraud is alarmingly common, with counterfeit money being one of the most pernicious examples. This is why the Bureau of Engraving (BEP), the Secret Service, and the Advanced Counterfeit Deterrence (ACD) Steering Committee have proposed a new policy to strengthen the security and value of the US dollar.
The new regulation, which went into effect in October, intends to make stores, enterprises, banks, and ATMs reject any “mutilated” money. Lower denomination notes are prioritized because they are used more frequently and are more easily damaged; nonetheless, any bill that is not in acceptable shape would be refused by most places.
Understanding the new rule
First and foremost, the bills that are considered legal tender in the United States are the seven that the Federal Reserve currently issues: $1, $2, $5, $10, $20, $50, and $100, as well as denominations that are no longer printed but remain in circulation until they are taken out and destroyed, which in this case are the $500, $1,000, and $10,000 notes.
Larger bills tend to last longer in circulation (the Federal Reserve has not printed the $10,000 bill since 1969, but some are still in private collections). Although the bank will still accept it for face value, an owner would make a lot more money if they sold it to another collector), therefore their condition is usually younger, and they are taken out of circulation less regularly.
The next thing to understand is what it means to have a “mutilated” law. The BEP defines “mutilated currency” as currency that has been damaged to the point where: (1) one-half or less of the original note survives, or (2) its state is such that its worth is uncertain.
Currency notes can be mangled in a number of ways. The most prevalent causes include fire, water, chemicals, and explosives; animal, insect, or rodent damage; and petrification or deterioration by burying.
Not every damaged note is considered mutilated; unclean, defaced, limp, torn, or worn notes are considered ineligible for redemption and, unlike “mutilated” bills, can be exchanged at commercial financial institutions.
What can you do with your “mutilated” dollar bills?
To redeem your “mutilated” bills, you must mail them directly to the BEP and make a mutilated money claim, as you cannot swap them at banks or merchants.
“The BEP will analyze the note. They have specialized equipment for determining the authenticity and full worth of the note. After that, a Fed currency representative explains that they can issue a check back to the customer.
These initiatives are intended to maintain the value of the American dollar while also introducing new redesigned versions of the $5, $20, $50, and $100 bills that will include additional security measures that will make them more difficult to counterfeit.
The Federal Reserve plans to release the revised $50 note in 2028, followed by the $20 bill in 2030. The $5 bill is slated to make its debut between 2032 and 2035, while the revised $100 bill will be available between 2034 and 2038.
Until these new bills are in circulation, how can a counterfeit bill be identified? Well, there are some simple indicators for the average person to determine whether a bill is legitimate. It should possess the following characteristics:
- Light-resistant security thread with the inscription “USA”
- 3D security strip that changes when tilting the bill
- Ink that changes color in the lower right corner
- Watermark when observing the bill against the light
- Microprints around the bill
- Embossed printing that gives texture to the bill
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