Our printed money today comes into
circulation by way of the Federal Reserve
System, which buys notes from the Trea-
sury to supply the currency needs of
the banking system. Old worn notes are
removed from circulation and replaced
with newer ones. Of the bills the BEP does
print, not all get equal use. In FY 2016,
the BEP printed 224,000 $50 notes and
179,000,000 $2 notes. Compare that with
1.9 billion $20s and 1.5 billion $100 bills.
Cash is not what it used to be for
many Americans who heavily depend
on debit and credit cards for a variety
of conveniences: points, rewards, cash
back rebates, extended warrantees and, of
course, the ability to purchase goods and
services with borrowed money. But even
in the wake of the nation’s growing appe-
tite for plastic, the paper dollar still has a
very big fan. Namely, the rest of the world.
According to the Federal Reserve, more
paper dollars circulate outside the United
States than domestically. Not surprisingly,
the largest note printed, the $100 bill,
seems to be the favored global import.
In 2011, Federal Reserve economist Ruth
Judson estimated that nearly two-thirds of
$100s were circulating abroad, continuing
a trend of increasing demand for the bills
going back to the 1990s.
Financial crises and continued global
problems only feed demand for US
“greenbacks.” The dollar is a safe haven.
And when you don’t trust your local
banana republic bank with dollar deposits,
the paper dollar is a safe haven. It is fair
to say that many nefarious transactions
are conducted in dollars, particularly $100
bills, which is a problem that has plagued
governments for decades.
On the one hand, the US dollar is one
of the nation’s greatest exports. Demand
for our currency helps promote America
throughout the world, and it keeps the
global financial system running smoothly.
On the other hand, high-denomination
cash facilitates illegal transactions and
criminal enterprises. The compromise
reached between these competing con-
cerns was settled decades ago. In 1969, the
Treasury discontinued the use of the $500,
$1,000, $5,000 and $10,000 bills, ostensi-
bly due to their lack of use. (The last year
the BEP printed high-denomination bills
was 1945.)
That said, there most certainly would
be a strong demand for denominations
above the $100 in today’s world. With the
$1,000 US Treasury Note, dated February 15, 1979 and due February 15, 1987.
tremendous demand for the $100 out-
side the United States, it strains credu-
lity that higher denominations would not
also be desired. The problem herein lies
in who would be desiring these notes,
and for what purpose. To be sure, there
would certainly be law-abiding citizens
that would use larger denominations in a
legal manner. And numismatists (money
collectors) would enjoy something new to
collect. But these legitimate users would
pale in comparison to the nefarious ele-
ments that would benefit by the reintro-
duction of these notes.
When it comes to the illicit trade of
guns, drugs, counterfeit merchandise and
stolen goods, high denomination currency
would only serve to aide in such trans-
actions. From terrorist organizations to
garden-variety criminal enterprises, gov-
ernments around the globe are robbed
36 FINANCIAL HISTORY | Fall 2017 | www.MoAF.org
of tax revenue through the underground
flow of cash. Estimates of the dollar vol-
ume of global crime are in the trillions of
dollars per year.
Even in cases whereby the initial sale
of a good or service is made legally, the
existence of high denominations could
serve to encourage the underreporting of
transactions for legal or tax purposes.
The European Central Bank responded
to these growing concerns in May 2016.
The 500 Euro note, a favorite of money
launderers, is no longer being issued, leav-
ing the 200 Euro as Europe’s highest
denomination. Other nations have taken
similar steps in recent years. In Novem-
ber 2016, the world’s largest democracy,
India, withdrew two of its large denomi-
nations: the 500 and 1,000 rupee. Officials
in Australia are considering the removal
their $100 bill from circulation. Canada