Quartz reports that 77% of the currency in circulation in the US is $100 bills.
The surprising finding is based upon figures released by the Federal Reserve in September.
The chart below from Edgar Feige shows the percentage of $100 in circulation have been rising steadily over the last five decades, while other denominations have been falling or staying flat.
Just because there are a lot of large denominations issued, we shouldn’t assume the people around us are living extravagant lives, burning through wallets filled mostly with Benjamins. Rather, the demand for the large denominations is coming from overseas, especially economies that are developing.
“[M]ost economists seem to believe $100 bills are most often used as stores of value—almost something like mini-Treasury bills that don’t pay any interest. This is especially so in developing countries, where problems with unstable currencies and inflation often mean the purchasing power of local currency gradually—or not so gradually—erodes over time,” writes Quartz.
And that demand is lucrative since the US gets to charge seigniorage when issuing money.
Chart from Edgar Feige’s study, New estimates of U.S. currency abroad, the domestic money supply and the unreported Economy