$931.4 million. That's how much the Federal
Reserve will spend to print bills in 2023. But there's a problem with
us cash. We haven't modernized or
changed our currency. That's probably a mistake. For example. We should have dollar coins
instead of paper notes. Physical currency has
changed around the world, but not in the US. The Nordic countries we see
a move away from cash into 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 four
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% of Americans in 2022 didn't use cash in a
given week. That number rose from 29%
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 one and a half to 2% for at
least a decade. The US 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. So what's wrong with us? Cash? And how can we fix
it? The $1 bill was the most
popular currency in the US for years. But in 2017, for
the first time in history, the $100 bill surpassed the
one. 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. The $100 comes from US
currency being a global currency, and a lot of
those hundreds are outside the country and they're
being used for 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 $100 bills. Credit cards or electronic
payments of any type. There's a way to track
them. But I do understand wanting
to be fully anonymous as you go about your day, and cash
does provide that. 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,
saying, 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, and they thought, nobody's
going to use cash in ten years. And 6 in 10 Americans say
convenience is key to spending. The US Treasury oversees
both the Bureau of Engraving and Printing, responsible
for paper notes, and the US mint, where coins are made. The 2023 budget to produce
paper bills is $931.4 million. About 28% of that
goes to paper, ink, and labor, while 63% goes to
manufacturing overhead, general support, research
and engraving. The fed says US 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? You don't need to do that
with a coin. The rest of the world makes
coins, usually for 1 to $2. It's hard to find a paper
note below five American dollars in most developed
countries. Japan's ¥500 coin is
equivalent to about 3.5 USD, and Australia and Europe
use 1 in 2 coins in place of notes. But the US has tried
switching to coins before. In the 1920s, the Treasury
reintroduced the $1 silver dollar and the $2 bill
because it will save money. $1 coins last a long time. $2 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 coins and twos except to save as a
souvenir. People have thought about
reviving the 500 and cut the production by five. Save money. Nobody's going
for it. The fed also says
transitioning to coins is inefficient and costly. The argument for the $1
coin, it was cheaper over the long run, but over time
there were upgrades, various additives and varnishes. So now the $1 bill, I think
has a life close to six years. Then why has every other
country done it? Why has Canada done it? Why hass England done it? Why has all of Europe done
it? Why has Japan done it? Australia, the UK and other
countries have also moved from paper to polymer
notes. Since 1988, when Australia
issued the first polymer notes. They've become very
popular across the world. For not going to polymer, a
linen cotton note has a certain feel to it, and
since this is a global currency, someone inside or
outside the US 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 as an organization,
they lose power. 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. 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. Modernizing cash is not
easy. 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. Your electric bill comes. You can go to a Walgreens
and pay that bill with cash. And cash is cheaper. I got my hair cut today,
$22, but they had a 4% surcharge if I used a card. There are 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. Not quite there
yet. Give the American people
options. Cash - it's been around for
a long time because it does its job really well.
