Worn US dollar bills are no longer incinerated; instead, the Federal Reserve now transforms them into fuel and cardboard products.

The Fate of Worn Dollar Bills: How the US Federal Reserve Manages Currency Disposal and Recycling

According to Radiotrek — Світ: The Federal Reserve is responsible for managing the US currency supply, including removing and replacing unfit banknotes. It regularly pulls damaged and overly worn dollar bills out of circulation. Once these notes come back to Federal Reserve banks, they go through automated inspection. Those still in acceptable condition are sent back into use. Any that are too torn or soiled are sent for destruction.

In the past, old bills were burned-a practice that ended because of air quality concerns. Today, they are shredded and processed into a fibrous pulp, which serves as raw material for various industries. Applications include:

• cardboard production;
• insulation and roofing materials;
• drilling fluids used in oil wells;
• souvenir products;
• fuel for power plants.

An interesting detail: the Federal Reserve does not publish the average circulation lifespan for the $2 banknote. That's because many Americans keep these bills as souvenirs or collector's items. Nonetheless, the Fed continues to maintain currency circulation while ensuring an environmentally friendly approach to disposal.

Removing worn banknotes from circulation and disposing of them responsibly are essential components of the US financial system. Through recycling, old bills gain a second life as secondary materials, reducing environmental impact. This approach underscores the Federal Reserve's commitment to sustainable development and responsible resource management.