What's Wrong With U.S. Cash
CNBC・2 minutes read
The Federal Reserve plans to spend $931.4 million in 2023 on printing bills despite the lack of modernization in US currency. Polymer notes are gaining popularity globally for their durability compared to paper notes, with 41% of Americans not using cash weekly in 2022 while cash demand increases.
Insights
- Polymer notes are increasingly adopted worldwide due to their durability, lasting four times longer than traditional paper notes, presenting a cost-effective and sustainable alternative.
- Despite a growing trend towards digital payments and decreasing cash usage in the US, the Federal Reserve's substantial expenditure on printing bills highlights the ongoing reliance on physical currency, prompting discussions on the need for modernization in the face of changing payment landscapes.
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Recent questions
Why is the Federal Reserve spending $931.4 million in 2023?
The Federal Reserve is spending $931.4 million in 2023 to print bills, as the US currency has not been modernized.
What are Nordic countries doing regarding currency?
Nordic countries are moving towards digital currency, embracing modernization trends.
What is the advantage of polymer notes over paper notes?
Polymer notes, a form of plastic, last four times longer than paper notes, leading to increased durability.
How has cash usage in America changed from 2018 to 2022?
Cash usage in America has decreased, with 41% not using cash in a week in 2022, up from 29% in 2018, despite increasing cash demand.
Why has the US faced resistance in switching to coins for lower denominations?
The US has faced resistance in switching to coins for lower denominations, like the $1 coin and $2 bill, due to challenges and opposition in the transition process.
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Summary
00:00
"Currency Evolution: From Paper to Plastic"
- The Federal Reserve will spend $931.4 million in 2023 to print bills, but the US currency has not been modernized.
- Nordic countries are moving towards digital currency, while India has a program to eliminate small cash denominations.
- Polymer notes, a form of plastic, are being adopted globally and last four times longer than paper notes.
- 41% of Americans did not use cash in a week in 2022, up from 29% in 2018, yet cash demand is increasing.
- The $100 bill has surpassed the $1 bill in circulation, with 18.5 billion $100 notes in circulation.
- The US has considered switching to coins for lower denominations, like the $1 coin and $2 bill, but faced resistance.
- Businesses are encouraged to offer both cash and electronic payment options, with some cities requiring businesses to accept cash.
