How a new denomination of currency is released?

Question

Whats its effects on economy?

Answer 1

A new denomination of currency being released into the economy has virtually no effect upon it. If the US were to issue a new $25 note, there would be no real effect on the economy, as long as the money supply itself as determined by the Federal Reserve were not changed. There may be other repercussions on the economy, such as the elimination of the $20 bill, since individuals may not want to carry this as much since the $25 is not that much higher and would be more convenient. Unless the new denomination were made of some precious material or had some real sort of collector value, it is unlikely that the broad economy would take notice at all. Things would continue as normal, with the new currency being used to transact business.