George Washington may have been the father of our country, but when it comes to the popularity of money, he takes a back seat to Ben Franklin. Strange as it may seem, the Federal Reserve says there now are more $100 bills now in circulation than singles. A recent article in the Washington Post suggests some reasons.
International Pop Star
According to the Post article, the average American only carries around $60 in cash, and as we rely increasingly on cards and other non-cash transactions, that number is likely to keep falling. So if we Yanks aren’t using the C-note, who is? Why are 80% of the $12 billion in hundreds circulating outside the US?
Turns out the US dollar isn’t just the official currency of the United States, it also enjoys that status in Ecuador, Panama, El Salvador and eight other nations and territories and is an unofficial currency in 50 other countries from Mexico to Mongolia. Since several of those places have less-than-stable economies, their businesses and citizens need a currency they can count on to hold its value. The overwhelming choice is the Yankee dollar, far outpacing the euro, Swiss franc, and British pound, all of which have lost value in comparison to the dollar over the last several years. Internationally, the dollar is used for both local and international trade and as a store of wealth.
Shady Deals
Dealing in illegal drugs, weapons, and other underground activities is strictly a cash business. The larger the denomination of a currency, the easier it is to move large amounts of cash about. For example, $1 million in $20 bills weighs more than 50 pounds. The same amount in 500-euro notes would weigh a little over two pounds. So as the 500-euro note is phased out starting in 2019, the C-note has soared in popularity in shady circles overseas, adding to its already favored use closer to home.
Are Big Bills on the Way Out?
The US took the few remaining $500, $1000 and $5000 bills out of circulation in 1969 due to lack of use, leaving the $100 Benjamin the largest note in circulation. But as noted above, even they are hardly ever used in everyday commerce since most big-dollar transactions are done electronically now. And given the large numbers of hundreds used in illicit businesses, there’s been talk of phasing Big Ben out. That was also a consideration in discontinuing the 500-euro note.
As of the moment, though, with newly enhanced security features to deter counterfeiting, it seems that Benjamins have a future.
