Do Federal Reserve Banks test all cash for counterfeit bills?
http://www.federalreserve.gov/boarddocs/testimony/2006/20060719/default.htm This article contains the most substantive information I could find on the subject – that the fed actually does work with the Secret Service (who has the responsibility for investigating counterfeit issues) to help investigate and prevent counterfeiting. They also mention that only 1/100th of one percent (or 1 in 10,000) of all money in circulation is counterfeit. There are machines that banks use to test bills veracity. These machines can scan thousands of bills an hour. The Fed may test all bills, or may sample them from individual banks and depositors. They may not test incoming bills, but would almost certainly check all the OUTgoing bills – wouldn’t be good getting a counterfeit bill from the US Government, would it? It wouldn’t be too difficult to track where bad bills come from, and trace them to an i
