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SOME INTRESTING FACTS ABOUT PAPER MONEY
Federal Reserve Notes, also United States banknotes, are the currently issued banknotes of the United States dollar.[1] The United States Bureau of Engraving and Printing produces the notes under the authority of the Federal Reserve Act of 1913[2] and issues them to the Federal Reserve Banks at the discretion of the Board of Governors of the Federal Reserve System.[2] The Reserve Banks then circulate the notes to their member banks,[3] at which point they become liabilities of the Reserve Banks[4] and obligations of the United States.[2]
Federal Reserve Notes are legal tender, with the words "this note is legal tender for all debts, public and private" printed on each note.[5] The notes are backed by financial assets that the Federal Reserve Banks pledge as collateral, which are mainly Treasury securities and mortgage agency securities[6] that they purchase on the open market by fiat payment.
Replacement banknote, commonly referred to as a star note, is a banknote that is printed to replace a faulty one and is used as a control mechanism for governments or monetary authorities to know the exact number of banknotes being printed. Also, since no two serial numbers can be the same,[1] the bill is simply reprinted with a symbol in the serial number, identifying it as a replacement for an error note. Replacement bills have different symbols to mark the error around the world, although the most popular examples are "star notes".