(NEW YORK) -- More than 1.1 billion new $100 bills that were set to be released next year have been quarantined in vaults across the country because of a creasing problem.
A person familiar with the matter told CNBC that the bills, produced for about 12 cents each, are the most costly ever made. It appears that the government has spent about $120 million to produce bills it can't use.
In October, the Federal Reserve identified a problem with printing the bills, which have new security measures to prevent counterfeiting. The magnitude of the problem was unclear at the time.
Sources tell ABC News that an initial quality check on a small sample of the new bills by the Bureau of Engraving and Printing determined that "more than half" the new bills were fine and could be distributed. But you don't have to be a Fed economist to realize what that means -- up to 49.9 percent of the bills could be defective.
At this point, the Bureau of Engraving and Printing has yet to determine the cause of the printing errors, according to sources investigating the matter. It could be the paper (supplied by Crane & Co.) or might be the BEP's presses.
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