[GaltAdonis]

The FED is a Private entity.

A US Note is (or was) redeemable in (backed by) gold or silver.

A Federal Reserve Note must - by law - be accepted in payment
for any and all debts. It is backed by the 'Full Faith and
Credit of the United States'. Whatever the heck that means.

[Fungi]

Almost correct. You forgot the interest part. And who owns the “Federal Reserve?”