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Michael Majchrowicz
By Michael Majchrowicz September 19, 2022

No, banks are not being forced to hand over physical currency to the government

If Your Time is short

  • The Federal Reserve is piloting an instant payment protocol, called the FedNow Service, which is expected to be more widely available to financial institutions and individuals in mid-2023.

  • The program will not require banks to turn over all physical currency.

A Facebook post claims all banks in the United States will soon be compelled to turn over all physical currency to the federal government because of an imminent transition to a universal electronic-only payment protocol.

"We were told all the banks will soon begin to turn in their coins to the Gov't and will no longer be available to the public or to a business," the Sept. 13 post reads.

The post was flagged as part of efforts by Facebook to combat false news and misinformation on its News Feed. (Read more about our partnership with Facebook.)

In a review of all public announcements and news releases published in 2022 by the Federal Reserve, we found no evidence of a program mandating coins and other physical currency be ceded to the feds for liquidation.

The Federal Reserve is rolling out FedNow Service, an instant payment pilot program, that is expected to be made more widely available to banks and consumers by mid-2023, the agency said Aug. 29. Pilot participation is limited to about 120 financial institutions. 

FedNow Service was first announced in August 2019.

"Through financial institutions participating in the FedNow Service, businesses and individuals will be able to send and receive instant payments at any time of day, and recipients will have full access to funds immediately, giving them greater flexibility to manage their money and make time-sensitive payments," the agency said at the time.

By eliminating the delay between when money is deposited or transferred and when it is available for use, the program aims to particularly help Americans on fixed incomes and those living paycheck to paycheck, one Fed official said when it was first announced.

There is no government mandate for financial institutions or private individuals to use this service. And there is no indication that participating banks will have to turn over their coins to the federal government. We also found no evidence to suggest individuals will have to liquidate physical currency to use the service.

Earlier this month, PolitiFact debunked a similar post that claimed President Joe Biden signed an executive order that implemented a digital currency and extended power to the government to electronically control it. 

Our ruling

A Sept. 13 Facebook post claimed without evidence that all American banks will soon have to turn over all coins to the federal government ahead of transitioning to a universal electronic-only payment protocol.

The post appears to be based on out-of-context information about an instant payment program, called FedNow Service, which is in the pilot stages and expected to be more widely available in mid-2023. The program is not mandated and participating banks don’t have to hand over their coins to the federal government.

We rate this claim False.

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No, banks are not being forced to hand over physical currency to the government

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