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As I keep saying... The police are a *consequence* of the law. Their decision to arrest someone is based on a significant level of professional discretion.
An encounter over a counterfeit $20 bill and a cooperative suspect = a ticket and a direction to leave the premises.
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That's a bit of an oversimplification isn't it? There are Federal, State, County, and city/town laws, rules and regulations, and those are further split into infractions, misdemeanors, or felonies. Those are further split into classes such as A,B,C, or I,II,III, etc.
In the case of possessing/passing counterfeit money, that is a Federal Felony and in this case police were required by statute to arrest Floyd and charge him with forgery.
To illustrate my point:
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According to federal law, crimes involving counterfeit currency are felonies; they carry a maximum sentence of 20 years in prison, as well as a fine. The maximum punishment is the same, regardless of the defendant’s relationship to the counterfeit money. In other words, the court could sentence you to 20 years in prison, whether you produced the counterfeit money, attempted to spend it, or simply were caught with the fake money in your possession.
What happens if you did not know that the money was fake? Is it not a gross injustice to send someone to prison for 20 years simply for buying something with cash that they thought was legitimate? It is unfair, but it sometimes happens. In 2017, Syed Ali of Houston faced criminal charges after he bought food at a Taco Bell with a fake $10 bill. Ali had gotten the bill from his father, who had received it as change after making a purchase at Home Depot. He was charged with forgery, which carries a sentence of two to 10 years.
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While police have discretionary powers (taking into custody vs. a ticket or citation) while enforcing laws, there are some laws that by statute require arrest.