Currency has been in American society for a long time. Actually, this question is for any kind of money really. Just wanted to specify so I make more sense,
So how did the government actually get USD/paper money into rotation? Did they just give it out? People traded in the old currency?
In: Economics
The federal government prints it, sends it out to regional federal reserve banks. Those then fulfill requests for cash from normal banks and credit unions in their region.
Sometimes this is done when cash gets turned in as damaged and the bills need to be replaced, other times if a bank branch is low on cash they will digitally transfer money to the federal reserve who then send the bank the equivalent cash for it.
Now how does the government get more cash in circulation when no one is requesting it? Simple, they just pay people with it. The government employs a lot of people, and pays a lot of private contractors to do things. So say you worked for the National Park service and they direct deposit 1,000 dollars to your bank account, whenever you go to withdraw cash, your bank will need to request that cash from the federal reserve
Latest Answers