The Federal Reserve has announced plans to spend $931.4 million in 2023 on printing bills, but experts are raising concerns about the future of U.S. cash. According to Aaron Klein, a senior fellow at the Brookings Institute, the failure to modernize or update U.S. currency is a mistake, and he advocates for the use of dollar coins instead of paper notes.
While electronic payments are becoming increasingly popular, experts believe that cash will not disappear entirely, pointing out that physical currency has been updated in other parts of the world. Douglas Mudd, curator and director of the American Numismatic Association, highlights the use of polymer notes in many countries, which last longer than traditional paper notes.
The $100 bill has now surpassed the $1 bill as the most popular currency denomination, leading to speculation about potential tax evasion and illegal activities. Franklin Noll of the Federal Reserve Bank of Kansas City notes that the global use of the U.S. dollar contributes to the high circulation of $100 bills outside the country.
Accessibility also plays a role in determining which bills and coins are circulated in the U.S. While the $2 bill remains in circulation, it is rarely seen in everyday transactions, and other denominations such as the $500, $1,000, and $5,000 were discontinued in 1969 due to low usage. Mudd explains that the $2 bill and half-dollar coin lost popularity because they were excluded from vending machine and parking meter markets, leading to decreased usage.
To learn more about the future of U.S. currency, watch the video on CNBC.
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