How does minted money get put into circulation?
In: Economics
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.
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