Efforts are underway in the U.S. to remove damaged dollar bills from circulation. Starting October, banks, stores, and the Bureau of Engraving and Printing (BEP) will work together to exchange or eliminate mutilated currency.
The goal is to improve financial security, reduce counterfeiting risks, and replace old bills with better-secured versions.
What Is a Mutilated Bill?
A dollar bill becomes “mutilated” when damaged due to fire, deterioration, cuts, discoloration, or marks that make it incomplete. Common causes include misuse or aging. Damaged bills are harder to authenticate and easier for counterfeiters to replicate.
How Damaged Bills Will Be Handled
The Federal Reserve has instructed banks to reject mutilated bills at ATMs. Instead, customers will need to visit a teller for assistance.
Authorized locations can exchange damaged bills, but severely damaged currency must be sent to the BEP for evaluation. Once verified as genuine, customers will receive replacements of equal value.
Why Is This Important?
Removing damaged currency ensures the U.S. economy relies on secure and intact bills. It also helps phase out outdated bills with weaker security features, reducing risks of theft and counterfeiting. By modernizing currency, the financial system becomes more robust.
Future Currency Overhauls
The Federal Reserve plans to update designs for $5, $20, $50, and $100 bills between 2028 and 2035. These changes will integrate advanced security features, making U.S. currency more resilient to counterfeiting.
1. What is considered a mutilated bill?
A bill with burns, cuts, discoloration, missing parts, or excessive wear is classified as mutilated.
2. Can banks exchange damaged bills?
Yes, many banks can exchange damaged bills unless the damage is severe. For extreme cases, bills must be sent to the BEP.
3. What happens if I keep a damaged bill?
You risk losing its value over time. Damaged bills should be exchanged promptly at authorized locations.
4. How does this help the economy?
Removing damaged and counterfeit bills improves the security of U.S. currency, reducing financial fraud and counterfeiting risks.
5. What should I do with several damaged bills?
Collect and send them together to the BEP to save on postage.
