In 2023, the Federal Reserve is shelling out a whopping $931.4 million ¹ on printing bills. That’s a lot of dough for something that’s increasingly looking like a relic in our digital age.
While the rest of the world is moving towards more modern forms of currency like polymer notes and digital transactions, the US seems to be stuck in the past with its paper money.
Cash Usage in the US: A Declining Trend?
Here’s a fun fact: according to the Pew Research Center, about 41% of Americans in 2022 didn’t use cash at all in a typical week ². That’s up from 29% in 2018. It seems like more and more of us are leaving our bills and coins at home.
Despite this, there’s actually more cash floating around than ever before, with a steady increase in circulation each year.
The Changing Face of American Currency
Once upon a time, the $1 bill was king in the US. But times have changed. Now, the $100 bill is the new star, exceeding $8.5 billion of them out there.
The popularity of the $100 bill is partly because it’s a global currency, but there’s also some speculation about its use in tax evasion and illegal activities, thanks to the anonymity of cash.
The Evolution of Currency Accessibility
Remember the $2 bill and the half dollar coin? They’re not as common as they used to be, mainly because they weren’t included in everyday things like vending machines and parking meters.
Back in the day, the US even stopped making certain denominations, like the half cent and larger bills over $100, as checks and credit cards became more popular.
The Budget Breakdown
Let’s talk numbers. The 2023 budget for making paper bills is pretty interesting. About 28% goes towards the actual materials (paper, ink, labor) and a whopping 63% is spent on manufacturing overhead. US bills are pretty tough, made to last with a blend of linen and cotton.
But other countries have moved to coinage for smaller denominations, which last way longer. Why haven’t we?
Global Trends vs. US Traditions
Around the world, countries are switching to polymer notes, which were first introduced by Australia in 1988 ³. These notes are more durable and secure.
But the US is sticking to its paper notes. Why?
Some experts think it might have to do with special interests and the financial implications of changing our currency system.
The Future of Cash
Modernizing cash isn’t simple. There’s a lot that goes into making banknotes, and technological advances are constantly changing the game. Some people are even talking about linking cash to the blockchain.
Cash still plays a big role in our economy, with many people preferring it for various reasons, and some cities even requiring businesses to accept it.
So, while the US seems to be holding onto its paper money tradition, the world of currency is rapidly evolving. The conversation about whether to stick with paper or move towards more modern solutions is ongoing, reflecting the complexities and challenges of balancing tradition with innovation in the financial world.
Martha A. Lavallie
Martha is a journalist with close to a decade of experience in uncovering and reporting on the most compelling stories of our time. Passionate about staying ahead of the curve, she specializes in shedding light on trending topics and captivating global narratives. Her insightful articles have garnered acclaim, making her a trusted voice in today's dynamic media landscape.