- The Federal Reserve will spend $931.4 million to print bills in 2023.
- The US has not modernized its currency while other countries have moved towards digital and polymer notes.
- Pew Research Center found that 41% of Americans did not use cash in a given week in 2022.
- Cash demand is still growing, but experts believe it will always have a valuable spot.
- The $100 bill has become the most popular currency due to its global use and potential for illegal activities.
- The US has tried switching to coins before, but it was not successful.
- Transitioning to coins is seen as inefficient and costly by the Federal Reserve.
- Other countries have successfully transitioned to coins and polymer notes.
- The choice to print paper notes is seen as a waste of money and influenced by special interests.
- Modernizing cash is complex, but technological advances could make it more convenient and connect it to the blockchain.
- Some businesses support both electronic and cash options, with innovative ways to bridge the gap.
- Cash is still preferred by some due to privacy, avoiding debt, and cost advantages.
- Some cities require businesses to accept cash, but ultimately businesses have the freedom to choose their payment methods.
- Digital mechanisms need to be more accessible before cash can be fully replaced.

The U.S. hasn't updated physical currency but some countries have changed lower denomination bills into coins and paper notes have been converted to polymer. While electronic payments are growing in the U.S., physical cash today is circulated more than ever. Experts claim that the choice to continue printing paper notes is fueled by special interests but The Federal Reserve says changing currency is costly and complex.

Chapters: 
00:00 — Introduction
01:34 — Circulation
03:59 — Production
07:20 — Modernizing money 

Produced and Edited by: Mark Licea
Supervising Producer: Lindsey Jacobson

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What's Wrong With U.S. Cash

That's how much the Federal Reserve will spend to print bills in 2023.

We haven't modernized or changed our currency.

For example, We should have dollar coins instead of paper notes.

Physical currency has changed around the world, but not in the U.S.

The Nordic countries, we see a move away from cash and to digital.

India had a government sponsored program to eliminate small denominations of cash.

The rest of the world has moved towards polymer notes, which are a form of plastic, lasts something like 4 times as long as the old paper notes.

Meanwhile, An increasing number of Americans are ditching cash for electronic payments.

The Pew Research Center found 41 percent of Americans in 2022 didn't use cash in a given week.

That number rose from 29 percent in 2018.

Still, cash demand is growing and experts say it's not going away.

There's actually more cash in circulation today than ever.

Cash production has been growing year by year by 1 half to 2 percent for at least a decade.

Government is very much engaged in electronic commerce, in addition to being the entity that prints cash.

In terms of electronic transactions replacing cash, no.

Cash always has an important and valuable spot.

The $1 bill was the most popular currency in the U.S.

But in 2017, for the first time in history, the $100 bill surpassed the 1.

And today, $18.5 billion $100 notes are in circulation.

$1 bills are the second most circulated at $14.3 billion notes and $2 bills are circulated the least at $1.5 billion.

And a lot of those hundreds are outside the country and they're being used for a store of value.

Some speculate that the rise in $100 bills in circulation may also be to avoid taxes or for illegal activity since cash can be traded anonymously.

I think the other argument is somebody involved in illegal activity will find a way to get around not having hundred dollar bills.

Credit cards or electronic payments of any type.

But I do understand wanting to be fully anonymous as you go about your day.

They don't want their wife to know they spent $200 on a coin for collectors, for example.

And in the past, accessibility has determined what currency Americans choose.

The $2 bill has lost its place in everyday usage.

It was left out of the vending machine market.

Denominations like the $2 bill or the half dollar coin, because there was no space made in the actual cash registers, they became less popular.

In the 1960s, the half dollar lost its place because it wasn't included in the use of parking meters.

The Federal Reserve has also ended production of currency before and tried to change different denominations.

America used to make things called half cents.

The penny wasn't always the lowest denomination of coin.

Bills over $100, like the 500, 1000 and 5000, were discontinued in 1969 because they were rarely spent.

And at that time, checks and credit card payments were on the rise.

In the late 1960s, the Bureau of Engraving and Printing called the Treasury and the Treasury called the Federal Reserve, say, if we're going to print these bills again, we have to make new plates.

There was a debate going on at the highest levels.

They thought nobody's going to use cash in 10 years.

And 6 in 10 Americans say convenience is key to spending.

Treasury oversees both the Bureau of Engraving and Printing, responsible for paper notes, and the U.S.

The 2023 budget to produce paper bills is $931.4 million.

About 28 percent of that goes to paper, ink and labor, while 63% goes to manufacturing overhead, general support, research and engraving.

Bills are made to last with a 25% linen, 75% cotton blend and that it takes 4000 double folds before a banknote will tear.

But many countries have moved their lower currency denominations to coins to help with longevity.

A metal dollar will last about 30 years in circulation.

How many of us have gone to a vending machine and tried to use a dollar bill and had to feed it in 5 or 6 times.

The rest of the world makes coins usually for 1 to 2 dollars.

It's hard to find a paper note below 5 American dollars in most developed countries.

to about 3.5 US dollars and Australia and Europe use 1 and

But the US has tried switching to coins before.

In the 1920s, the Treasury reintroduced the 1 dollar silver dollar and the 2 dollar bill because it'll save money.

You only have to print half as many as the ones.

Then they tried it in the 1960s under the Kennedy administration.

People didn't want 1 dollar coins and twos except to save as a souvenir.

People have thought about reviving the 500, cut the production by 5, save money.

The Fed also says transitioning to coins is inefficient and costly.

The argument for the 1 dollar coin, it was cheaper over the long run.

But over time, there were upgrades, various additives and varnishes.

So now the 1 dollar bill, I think, has a life close to 6 years.

Australia, the UK and other countries have also moved from paper to polymer notes.

Since 1988, When Australia issued the first polymer notes, they become very popular

If we're not going to polymer, a linen cotton note has a certain feel to it.

Since this is a global currency, someone inside or outside of the U.S.

May not realize if this is a counterfeit or not.

Some experts claim that the Fed's choice to print paper notes is a waste of money fueled by special interests.

Vendors hire lobbyists to make sure that the mint buys the same type of alloy for their coins or in the case of paper, it's a major part of their production.

If they lose that production, they lose jobs.

There are billions of dollars to be saved from going from paper dollar notes, which I might add are printed using toxic ink for anti counterfeiting.

Why is there a pushback in the United States to moving towards dollar coins?

The world that we're in and the world that we're headed to, we're certainly not spending time thinking, are coins better?

I just saw a statistic that said over 40% of people said they had not used cash at all in the past week.

In fact, I couldn't tell you if I had any in my wallet right now.

Banknotes are extremely complex instruments.

And then there's buried deep inside the note various tags.

And innovation is changing the way we use cash.

Those technological advances are what's really going to influence people's lives for the better.

Making cash something that can carry value electronically, connecting notes to the blockchain.

Many businesses support electronic and cash options, plus innovative ways to bridge the gap.

If you still transact in cash, but you need to buy or want to buy something online, get a QR code.

There's a variety of stores that will do this.

Scan the QR code, pay in cash, and they release your merchandise.

You can go to a Walgreens and pay that bill with cash.

But they had a 4 percent surcharge if I used a card.

a lot of people that use cash because they don't want to spend money they don't have.

New York City and Philadelphia are even requiring businesses to accept cash.

Legislation being passed that cash must be available and that you cannot have a purely cashless store.

However, with the exception of changes to state law, the Fed says businesses are free to determine what method of payment to accept.

To access digital mechanisms would need to be ubiquitous, either through a smartphone or through an internet connection.

Cash, it's been around for a long time because it does its job really well.


Speaker 0: $931.4 million. That's how much the Federal Reserve will spend to print bills in 2023. But there's a problem with U.S. Cash.

Speaker 1: We haven't modernized or changed our currency. That's probably a mistake. For example, We should have dollar coins instead of paper notes.

Speaker 0: Physical currency has changed around the world, but not in the U.S.

Speaker 2: The Nordic countries, we see a move away from cash and to digital. India had a government sponsored program to eliminate small denominations of cash.

Speaker 3: The rest of the world has moved towards polymer notes, which are a form of plastic, lasts something like 4 times as long as the old paper notes.

Speaker 0: Meanwhile, An increasing number of Americans are ditching cash for electronic payments. The Pew Research Center found 41 percent of Americans in 2022 didn't use cash in a given week. That number rose from 29 percent in 2018. Still, cash demand is growing and experts say it's not going away.

Speaker 3: There's actually more cash in circulation today than ever.

Speaker 4: Cash production has been growing year by year by 1 half to 2 percent for at least a decade.

Speaker 2: U.S. Government is very much engaged in electronic commerce, in addition to being the entity that prints cash.

Speaker 1: In terms of electronic transactions replacing cash, no. Cash always has an important and valuable spot.

Speaker 0: So what's wrong with U.S. Cash And how can we fix it? The $1 bill was the most popular currency in the U.S. For years. But in 2017, for the first time in history, the $100 bill surpassed the 1.

And today, $18.5 billion $100 notes are in circulation. $1 bills are the second most circulated at $14.3 billion notes and $2 bills are circulated the least at $1.5 billion.

Speaker 4: The $100 comes from U.S. Currency being a global currency. And a lot of those hundreds are outside the country and they're being used for a store of value.

Speaker 0: Some speculate that the rise in $100 bills in circulation may also be to avoid taxes or for illegal activity since cash can be traded anonymously.

Speaker 4: I think the other argument is somebody involved in illegal activity will find a way to get around not having hundred dollar bills.

Speaker 3: Credit cards or electronic payments of any type. There's a way to track them.

Speaker 2: But I do understand wanting to be fully anonymous as you go about your day. And cash does provide that.

Speaker 3: They don't want their wife to know they spent $200 on a coin for collectors, for example.

Speaker 0: And in the past, accessibility has determined what currency Americans choose.

Speaker 3: The $2 bill has lost its place in everyday usage. It was left out of the vending machine market. Denominations like the $2 bill or the half dollar coin, because there was no space made in the actual cash registers, they became less popular. In the 1960s, the half dollar lost its place because it wasn't included in the use of parking meters.

Speaker 0: The Federal Reserve has also ended production of currency before and tried to change different denominations.

Speaker 1: America used to make things called half cents. The penny wasn't always the lowest denomination of coin.

Speaker 0: Bills over $100, like the 500, 1000 and 5000, were discontinued in 1969 because they were rarely spent. And at that time, checks and credit card payments were on the rise.

Speaker 4: In the late 1960s, the Bureau of Engraving and Printing called the Treasury and the Treasury called the Federal Reserve, say, if we're going to print these bills again, we have to make new plates. There was a debate going on at the highest levels. They thought nobody's going to use cash in 10 years.

Speaker 0: And 6 in 10 Americans say convenience is key to spending. The U.S. Treasury oversees both the Bureau of Engraving and Printing, responsible for paper notes, and the U.S. Mint, where coins are made. The 2023 budget to produce paper bills is $931.4 million.

About 28 percent of that goes to paper, ink and labor, while 63% goes to manufacturing overhead, general support, research and engraving. The Fed says U.S. Bills are made to last with a 25% linen, 75% cotton blend and that it takes 4000 double folds before a banknote will tear. But many countries have moved their lower currency denominations to coins to help with longevity.

Speaker 3: A metal dollar will last about 30 years in circulation. How many of us have gone to a vending machine and tried to use a dollar bill and had to feed it in 5 or 6 times. You don't need to do that with a coin.

Speaker 1: The rest of the world makes coins usually for 1 to 2 dollars. It's hard to find a paper note below 5 American dollars in most developed countries.

Speaker 0: Japan's 500 yen coin is equivalent

Speaker 4: to about 3.5 US dollars and Australia and Europe use 1 and

Speaker 0: 2 coins in place of notes. But the US has tried switching to coins before.

Speaker 4: In the 1920s, the Treasury reintroduced the 1 dollar silver dollar and the 2 dollar bill because it'll save money. 1 dollar coins last a long time. 2 dollar bills. You only have to print half as many as the ones. It didn't go over at all.

Then they tried it in the 1960s under the Kennedy administration. People didn't want 1 dollar coins and twos except to save as a souvenir. People have thought about reviving the 500, cut the production by 5, save money. Nobody's gone for it.

Speaker 0: The Fed also says transitioning to coins is inefficient and costly.

Speaker 4: The argument for the 1 dollar coin, it was cheaper over the long run. But over time, there were upgrades, various additives and varnishes. So now the 1 dollar bill, I think, has a life close to 6 years.

Speaker 1: And why is every other country done? Why is Canada done it? Why is England done it? Why is all of Europe done it? Why is Japan done it?

Speaker 0: Australia, the UK and other countries have also moved from paper to polymer notes.

Speaker 3: Since 1988, When Australia issued the first polymer notes, they become very popular

Speaker 4: in the rest of

Speaker 3: the world.

Speaker 4: If we're not going to polymer, a linen cotton note has a certain feel to it. Since this is a global currency, someone inside or outside of the U.S. May not realize if this is a counterfeit or not.

Speaker 0: Some experts claim that the Fed's choice to print paper notes is a waste of money fueled by special interests.

Speaker 3: Vendors hire lobbyists to make sure that the mint buys the same type of alloy for their coins or in the case of paper, it's a major part of their production. If they lose that production, they lose jobs. As an organization, they lose power.

Speaker 1: There are billions of dollars to be saved from going from paper dollar notes, which I might add are printed using toxic ink for anti counterfeiting. So there's an environmental impact. Why is there a pushback in the United States to moving towards dollar coins? The Federal Reserve.

Speaker 2: The world that we're in and the world that we're headed to, we're certainly not spending time thinking, are coins better? I just saw a statistic that said over 40% of people said they had not used cash at all in the past week. In fact, I couldn't tell you if I had any in my wallet right now.

Speaker 0: Modernizing cash is not easy.

Speaker 4: Banknotes are extremely complex instruments. And then there's buried deep inside the note various tags.

Speaker 0: And innovation is changing the way we use cash.

Speaker 2: Those technological advances are what's really going to influence people's lives for the better.

Speaker 4: Making cash something that can carry value electronically, connecting notes to the blockchain.

Speaker 0: Many businesses support electronic and cash options, plus innovative ways to bridge the gap.

Speaker 2: If you still transact in cash, but you need to buy or want to buy something online, get a QR code. There's a variety of stores that will do this. Scan the QR code, pay in cash, and they release your merchandise.

Speaker 4: Your electric bill comes. You can go to a Walgreens and pay that bill with cash.

Speaker 1: And cash is cheaper. I got my haircut today. 22 dollars. But they had a 4 percent surcharge if I used a card. There are

Speaker 3: a lot of people that use cash because they don't want to spend money they don't have.

Speaker 0: New York City and Philadelphia are even requiring businesses to accept cash.

Speaker 4: Legislation being passed that cash must be available and that you cannot have a purely cashless store.

Speaker 0: However, with the exception of changes to state law, the Fed says businesses are free to determine what method of payment to accept.

Speaker 2: To access digital mechanisms would need to be ubiquitous, either through a smartphone or through an internet connection. Not quite there yet.

Speaker 4: Give the American people options. Cash, it's been around for a long time because it does its job really well.

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What's Wrong With U.S. Cash