I'm glad you understand this, now how about explaining this to others. An interesting thing about this is vault cash at the FED is not included in the money supply. Vault cash is not counted as a part of the money aggregate M1 which comprises currency held by the public plus demand deposits, i.e. transaction money held by the public. However it is a part of the monetary base which comprises bank deposits at the Fed and all currency issued by the Fed. Vault cash and deposits at the Fed are what make up the reserves of the banking system.
Vault cash is the major component of banking system reserves.
The Fed picks up the cost of the printing and destruction of FRNs in the price it pays to the Treasury to purchase those bills, about 4 cents each. That expense reduces the total earnings of the Fed which come mainly from interest on the bonds it holds.