Bills of Credit

Non-interest-bearing promissory notes issued by the government and backed by its faith and credit to be paid when presented by their holders, which are in the form of currency and are intended to be circulated and exchanged in the community as money.

The federal government, acting through the FEDERAL RESERVE banks, issues bills of credit in the form of dollar bills that are promises to pay the specific denominations indicated on them to the bearer of such paper on demand. Article I, Section 10 of the Constitution, in order to provide a uniform standard of money throughout the United States, prohibits states from issuing their own bills of credit for circulation as currency.