Everyone can lend dollars or bitcoins and receive them back. But this is not puting them on the market or issuing them. Nor this is withdrawing them from the market or redeeming them. Only the issuer can withdraw and redeem a financial instrument. If you lend a bond to your neighbor and then receive the bond back, that doesn't mean the bond is redeemed. Only the bond issuer can do that by paying face value.
No, money issuers never redeem anything. The money in circulation will not be withdrawn from the market except to renew the ones that have been physically damaged. As I said, bankers (who serve society in general) are only third parties as first dealers. You have to understand why fiat is always devalued. You should also learn how the bank's fractional reserve system works, how that banker with their rights can easily double digits of money just from their teller's computers.
The fact that people rarely know is that the government only publishes the amount of physical money circulating, if you know the amount of money circulating in banks, you will be surprised that physical money is currently unable to cover it (if all customers withdraw all their savings). So, what you believe that fiat can be redeemed is wrong.
