How does minted money get put into circulation?
In: Economics
the government uses it to pay for stuff. Bam its in circulation now.
There are other ways, but its as simple as that.
Minted money is just another product. Usually banks collect old notes and exchanges (ie essentially buys new notes using old notes) it from the US Treasury. In this kind of transaction, there is no creation of money as it is just a 1 for 1 exchange.
Notes and coins are a small percentage of the actual “money” in an economy. Most of the “money” used in a modern economy is electronic or “on the books”. The simplest example is a bank current account. Any money deposited there can be used to purchase things (ie functions as money) but it is not represented by actual notes and coins. They are just entries in the ledger of the bank.
Typically banks will order the money from the mint in bulk. The banks then use these bills to refill their ATMs and when people withdraw money from the bank, like shops refilling their change. Damaged nots that are turned into the banks are returned to the mint and destroyed.
A lot of mints even have a public web shop where you can buy newly minted money. The famous ones are the US mint where you can buy things like sheets of uncut bills as well as stacks of $2 bills. Other countries mints have similar web shops.
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