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The writer is author of The Almighty Dollar
In late May, US Treasury secretary Scott Bessent confirmed reports that his department had been preparing engravings of a $250 bill with Donald Trump’s face on it. It is transparently not allowed under current US law to put a live person’s face on an American dollar, a point Bessent conceded. Treasury had put together a design, he said, while waiting for Congress to pass a law allowing it.
There are many arguments against putting Trump’s face on a Federal Reserve note. Suspicion of rulers who put themselves on the coin is an ancient human habit. Alexander the Great supplied mints in the field with plundered silver to pay his own soldiers. He might have wept when he could no longer conquer, but he definitely had the restraint to put his father’s face on the coins, not his own.
If Trump succeeds in convincing Congress to vote in favour of his face on a bill, it will signal a change of regime in how the country views its sitting president. But there’s another problem with the $250 bill. It was designed hastily and in secret, and for that reason it might not even work.
There is no such thing as the dollar. Each thing we consider a dollar is a different financial instrument, held by a different financial institution. Most Americans rely on deposit dollars — liabilities on the balance sheets of commercial banks. Banks in turn rely on reserves, liabilities on the balance sheet of the Fed. America’s physical currency is either fiduciary coins manufactured by the US Mint, or printed cotton and linen bearer bonds that also sit on the Fed’s balance sheet as liabilities.
All of these trade cleanly with each other, at par — at a 1:1 ratio. Central bankers refer to this as the singleness of money. A dollar is a dollar is a dollar. Singleness doesn’t happen by accident. A country has to build it, slowly, by sweating the details.
Dollar deposits in America didn’t always clear with each other at par. When a bank failed, often depositors had to wait years for a receiver to sell the bank’s remaining assets and recover a fraction of its deposits. America’s Federal Deposit Insurance Corporation, created after the worst bank runs of the early Depression, guarantees that every depositor in a failed bank is made completely whole, immediately.
In the late 1960s, the Federal Reserve had to chase down small state banks that still refused to honour cheques from other banks at par. And when several banks failed in 2023, the Treasury, the Fed and the FDIC agreed to make depositors whole, at par, well beyond the limits of their deposit insurance. They did not do this out of charity. They did this to maintain the singleness of money. A dollar must be a dollar.
It’s not any easier to make Federal Reserve notes — dollar bills — clear at par. The Fed maintains an archipelago of cash warehouses with secure double doors that accept cash from banks in armoured trucks, count it with massive machines and credit it to the banks’ reserves. To supply tellers and ATMs, the Fed also runs this whole process in reverse.
The Treasury designed Trump’s $250 bill to be ready if Congress acts. The law gives Bessent wide latitude to design money, but the decisions of the secretary alone do not guarantee the singleness of money. Every step in that process of moving cash in and out of the Fed has to be tested. The process normally takes years.
There are more than 10mn machines in the world that read and count dollar notes. A $250 note has to be fed into one end of a machine and come out the other, with a count worth $250. The Fed chairs the United States Cash Machine Group, a collection of manufacturers. Normally the Bureau of Engraving and Printing provides samples to the group for testing. That does not seem to have happened yet.
Under a normal schedule, the Treasury would release the new design six to eight months before it became legal tender, as part of a process to teach tellers and shopkeepers how to recognise counterfeits. This, too, does not yet seem to have happened.
If Congress approves Trump’s $250 note, the Fed will accept it, and give it to banks in exchange for reserves. But it’s not just the Fed’s balance sheet that makes a dollar a dollar. It’s all these other things, the careful deliberate steps to release bank notes and make sure they slide cleanly into an armoured truck and out of an ATM, that ensures the singleness of money. None of them will happen before the end of this 250th anniversary year.
Process isn’t just for nerds. It’s how you make dollars. Without it, Trump’s $250 note to honour the nation’s founding won’t really function as 250 dollars, and will instead serve as a wall hanging for the faithful. Which is perhaps all it was ever meant to be anyway.
