Benjamax
America's national wallet is stuffed with $100 bills. That’s the conclusion from Fed data reported by the WSJ, which reveals that the number of $100 bills in circulation has more than doubled between 2012 and 2022, making the Benjamin Franklin-bearing notes the most common US paper currency. As of 2022, there were 18.5 billion in circulation — 26% more than the number of $1 bills floating around — with plans to print up to another 1.6 billion $100 bills this year.
So, where are all these extra hundreds going?
Note taking
Aside from the Fed’s money-printing splurge in 2020, which saw the number of $20 notes go up by ~23% in a single year to support the Covid-stricken economy, much of the rise in the number of $100 notes has seen Americans increasingly use them as a means of storing cash, rather than spending it.
One explanation why denominations like the $100 bill tend to get saved is that larger bills enter circulation much faster than they leave, as consumers are more hesitant to part with them. Studies have shown that if people are given twenty $1 bills, they are much more likely to spend them than if they are given one$20 bill — a fascinating phenomenon known as the denomination effect. Another is that demand for US currency overseas has surged since the pandemic alongside mounting geopolitical instability in multiple countries, with more than half of all $100 bills estimated to be held abroad.
Regardless of the rise in hundreds, cards are still king: 60% of all payments are made with debit or credit cards, and, despite a greater volume being circulated, cash ranks behind those as the 3rd most-used payment method by number of transactions in the US… possibly because everyone’s storing it under their bed.
