U.S. Currency, Coins & the Mint

The United States monetary system is governed by 31 U.S.C. §§ 5101–5155, with the dollar as the unit of currency (31 U.S.C. § 5101). Two Treasury agencies produce physical money: the Bureau of Engraving and Printing (BEP) prints Federal Reserve notes (the paper currency you carry, from $1 to $100 bills), and the U.S. Mint strikes coins at facilities in Philadelphia, Denver, San Francisco, and West Point. Approximately $2.3 trillion in Federal Reserve notes is in circulation; the Federal Reserve orders new notes from the BEP each year primarily to replace worn bills (a $1 bill lasts about 18–22 months; a $100 bill lasts 15 years). The Mint produces roughly 8–15 billion coins annually, but currency economics are quirky: a penny costs approximately 3.7 cents to produce and a nickel costs about 13.8 cents (FY2024 Mint figures) — both losing money for taxpayers. Under 31 U.S.C. § 5103, Federal Reserve notes are legal tender for all debts, public and private — businesses must generally accept them. Currency is legal tender but not counterfeit-proof: the Secret Service investigates counterfeiting under 18 U.S.C. § 471 (up to 20 years imprisonment), with approximately $200 million in counterfeit currency detected annually. Digital currency and central bank digital currency (CBDC) remain under study; no U.S. CBDC has been authorized as of 2026.

Current Law (2026)

Legal Authority

• 31 U.S.C. § 5103 — Legal tender (United States coins and currency, including Federal Reserve notes, are legal tender for all debts, public charges, taxes, and dues)
• 31 U.S.C. § 5111-5112 — Minting and issuing coins (Secretary of the Treasury shall mint and issue coins in denominations specified; design authority; composition — pennies: copper-plated zinc; nickels: cupronickel; dimes/quarters/halves: cupronickel clad copper; dollars: manganese brass clad copper)
• 31 U.S.C. § 5114 — Engraving and printing currency and security documents (Bureau of Engraving and Printing produces Federal Reserve notes, postage stamps, and other security documents; design and security features)
• 31 U.S.C. § 5116-5118 — Bullion and numismatic coins (American Eagle gold, silver, platinum, and palladium bullion coins; proof and uncirculated coins for collectors)
• 31 U.S.C. § 5151 — Conversion of currency of foreign countries (Treasury determines exchange rates for customs and accounting purposes)
• 18 U.S.C. §§ 470-514 — Counterfeiting (manufacturing, possessing, or passing counterfeit U.S. currency is a federal crime; up to 20 years imprisonment; Secret Service enforcement)

How It Works

The U.S. monetary system — coins and paper currency — is produced by two Treasury Department bureaus and distributed through the Federal Reserve. Together they maintain the physical money supply that, despite the growth of electronic payments, remains essential to the American economy.

The Bureau of Engraving and Printing (BEP), with facilities in Washington, D.C. and Fort Worth, Texas, produces all U.S. paper currency — Federal Reserve notes. Each note is printed on specialized paper (75% cotton, 25% linen) through intaglio and offset printing, incorporating security features including watermarks, embedded security threads, color-shifting ink, microprinting, and (on the $100) a 3D security ribbon. BEP produces approximately 7–8 billion notes per year, primarily replacing worn notes returned by Federal Reserve Banks; the most common denomination by value in circulation is the $100 bill, and by count, the $1 bill. The U.S. Mint, with circulating-coin facilities in Philadelphia and Denver and specialty facilities in San Francisco (proof coins) and West Point (bullion and commemoratives), produces all U.S. coinage. Silver was removed from dimes and quarters in 1965; pennies shifted from solid copper to copper-plated zinc in 1982. The Mint also produces American Eagle bullion coins (gold, silver, platinum, palladium) for investors and commemorative coins authorized by Congress for specific events, with surcharges often benefiting designated nonprofits or causes.

The penny costs approximately 3.7 cents to produce (FY2024) — meaning the government loses money on every one minted. The Treasury announced in 2025 that the Mint would cease producing new pennies for circulation after exhausting existing blanks; final circulating pennies were struck in 2025. Proposals to eliminate it have circulated for decades; Canada eliminated its penny in 2013 with minimal economic disruption. The Secret Service (originally part of Treasury, now within DHS) is the primary federal enforcement agency for counterfeiting. Modern U.S. currency's layered security features make high-quality counterfeiting technically difficult, but advances in digital printing continue to drive cat-and-mouse improvements in both counterfeit techniques and authentication measures.

How It Affects You

If you use cash regularly, are unbanked, or rely on physical currency: Under 31 U.S.C. § 5103, U.S. coins and Federal Reserve notes are legal tender for all debts, public charges, taxes, and dues — but there is no federal law requiring private businesses to accept cash. Stores, restaurants, and transit systems can legally post "no cash" policies, and more are doing so. However, at least a dozen states and several major cities (including Massachusetts, New Jersey, New York City, and San Francisco) have enacted right-to-pay-with-cash laws requiring businesses to accept physical currency. If you're unbanked or prefer cash, check your state's rules — and know that federal tax obligations (IRS) must accept cash payment. If you're handed a note you think might be counterfeit, don't spend it: call the Secret Service or your local police. Knowingly passing a counterfeit note is a federal crime carrying up to 20 years under 18 U.S.C. § 473. Look for the color-shifting ink on the numeral, the embedded security thread (visible when backlit), and the watermark portrait on $100 bills.

If you're a coin collector, precious metals investor, or numismatist: The U.S. Mint sells directly to the public through usmint.gov — no dealer markup required for many products. American Eagle bullion coins (gold, silver, platinum, palladium) are available from Mint-authorized dealers at spot price plus a premium; the Mint itself sells to authorized purchasers who distribute to dealers. Proof and uncirculated collector sets (annual proof sets, silver proof sets, quarters sets) are sold directly through the Mint's website, typically in limited mintages that can sell out quickly after release dates are announced. Commemorative coins — authorized by Congress for specific events, institutions, or causes — are sold during defined windows and often carry surcharges that fund designated organizations. Track upcoming releases on the Mint's product schedule. For estate and tax purposes: bullion coins held for over a year are collectibles taxed at a maximum 28% capital gains rate (higher than the standard 20% long-term rate), and the IRS requires 1099-B reporting on sales through dealers above certain thresholds.

If you own a business that handles cash — retail, restaurants, small merchants: Counterfeiting risk is real and the loss falls on you — banks and the Secret Service will confiscate a counterfeit note turned in, and you won't be reimbursed. The $100 bill is the most counterfeited denomination; the redesigned note (2013) has significant security features, but older-design $100s and lower-denomination notes are also targeted. Counterfeit detection pens (which test the paper composition) provide basic protection but can miss sophisticated counterfeits; UV light detectors and automated bill validators are more reliable for high-volume cash handlers. The Secret Service offers free training resources for businesses on detecting counterfeits. If you do discover a fake and report it, document the transaction — time, description of the person who passed it, and serial number if legible — before turning it in. On cash acceptance policy: if you're in a state without a cash-acceptance mandate, you can legally refuse cash, but clearly posting your payment policy avoids customer disputes and potential regulatory scrutiny in jurisdictions that are expanding cash access requirements.

If you work in international trade, finance, or travel frequently: The U.S. dollar functions as the world's primary reserve currency — approximately 57-60% of global foreign exchange reserves are held in dollars, and most international commodity transactions (oil, metals, agricultural products) are priced in dollars. This gives the U.S. government what economists call "exorbitant privilege" — the ability to borrow in its own currency at lower rates than otherwise possible. For practical purposes: U.S. currency is widely accepted in many dollarized or dollar-adjacent economies (Ecuador, Panama, Cambodia, parts of the Caribbean) without any exchange required. In most other countries, you'll exchange at local currency rates; the Treasury Department determines official exchange rates for customs and government accounting purposes (31 U.S.C. § 5151), but these differ from commercial bank and bureau de change rates. Any currency — foreign or domestic — brought into or taken out of the U.S. exceeding $10,000 in value must be declared on FinCEN Form 105 (FBAR and reporting rules apply separately to financial accounts held abroad).

State Variations

Currency and coinage are exclusively federal. However:

• Some states and municipalities have enacted "right to pay with cash" laws requiring businesses to accept cash
• State sales tax collection applies to coin and bullion purchases in some states
• State unclaimed property laws affect dormant bank accounts and financial instruments

Implementing Regulations

• 31 CFR Part 82 — 5-Cent and One-Cent Coin Regulations (the coin melting prohibition). This Part prohibits the export, melting, or treatment of pennies and nickels — enacted in 2006 when the metal value of both coins exceeded their face value. Key provisions:

  • § 82.1 — Prohibition: no person may export, melt, or treat any U.S. 5-cent coin or one-cent coin except as authorized by the Secretary of the Treasury
  • § 82.2 — Exceptions: (a) export of coins with aggregate face value of $100 or less per shipment if being used as money or for numismatic purposes; (b) melting by the U.S. Mint in its own operations; (c) incidental melting during normal manufacturing or scientific processes where the coins' properties as currency are not being exploited; (d) coins exported under a Treasury-issued license
  • § 82.4 — Penalties: violation is punishable by a fine up to $10,000 and/or imprisonment up to 5 years under 31 U.S.C. § 5111(d); convicted persons may also forfeit the coins and any equipment used
  • § 82.3 — Licensing: the Secretary may issue licenses authorizing export or melting for legitimate industrial or scientific purposes

  The prohibition was enacted when the metal content of both coins — zinc for pennies, cupronickel for nickels — exceeded their face value, creating an arbitrage opportunity for bulk melters. The $100 export exception preserves the right to carry pocket change across a border without committing a federal crime. The regulation does not apply to older silver coins (pre-1965 dimes, quarters, and half-dollars), which are legally meltable and are a separate market. Note: The existing stub description of this Part as covering "mutilated coins, gold and silver bullion" was inaccurate — Part 82 covers only the penny and nickel melting prohibition; mutilated currency is handled by BEP under 31 CFR Part 100.

• 31 CFR Part 100 — Bureau of Engraving and Printing regulations (mutilated and contaminated currency redemption).

Pending Legislation (119th Congress)

• HR 1401 (Rep. Biggs, R-AZ) — Currency Optimization, Innovation, and National Savings Act of 2025 (COINS Act). Would halt new penny production for 10 years while keeping the penny as legal tender. Status: Introduced.
• HR 386 (Rep. Davidson, R-OH) — Chinese Currency Accountability Act of 2025. Would block increases in China's renminbi weight in the IMF's SDR basket unless Treasury certifies compliance with currency and export-credit standards. Status: Passed House.
• S 1223 (Sen. Tuberville, R-AL) — Prohibiting Foreign Adversary Interference in Cryptocurrency Markets Act. Would bar U.S. registration of cryptocurrency platforms owned by entities tied to foreign adversary countries. Status: Introduced.
• HR 2112 (Rep. Donalds, R-FL) — Would codify the Strategic Bitcoin Reserve Executive Order into statute, formalizing the U.S. digital asset stockpile. Status: Introduced.
• S 2143 (Sen. Schiff, D-CA) — Curbing Officials' Income and Nondisclosure (COIN) Act. Would bar public officials from certain digital-asset deals, add penalties, and require stablecoin issuer certifications. Status: Introduced.

Recent Developments

• A national coin shortage emerged during COVID-19 as coin circulation slowed, prompting the Fed to ration coin distribution
• Proposals to redesign U.S. currency to feature more diverse historical figures have been debated
• The rise of digital payments has reduced cash transaction volume, though cash remains important for unbanked populations and small transactions
• Central Bank Digital Currency (CBDC) research continues at the Federal Reserve, though no "digital dollar" has been authorized. See also Federal Debt & Treasury for how currency issuance relates to government financing
• The BEP is building a new production facility in Maryland to replace its aging Washington, D.C. plant
• Senate Democrats pressed the Treasury Department in April 2026 for answers about a plan to add President Trump's signature to newly minted U.S. paper currency, raising questions about the process for changing currency design and the traditional practice of featuring only the Treasury Secretary's signature.