According to data provided by the Federal Reserve, the amount of currency in circulation in the United States has steadily increased over the past two decades.
At the end of 2000, the Federal Reserve reported that there were 21.3 billion notes in circulation in the U.S. This includes Federal Reserve notes, U.S. notes and currency no longer issued.
By the end of 2020, the Federal Reserve was reporting that there were 50.3 billion notes circulating in the U.S. – an increase of approximately 150 percent over twenty years.
Replacing Unfit Notes
As U.S. currency makes its way through the economy, it wears down and becomes “unfit” for use. Each year, the Federal Reserve Board places an order for currency from the U.S. Treasury Department’s Bureau of Engraving and Printing. Many of the ordered notes go on to replace unfit notes.
According to the Federal Reserve, the “use the majority of new notes printed each year to replace unfit notes that Reserve Banks have removed from circulation. For example, we estimate that in 2015, 85 percent of the new notes printed will replace destroyed currency, while the remaining 15 percent will meet increased public demand.”
Value of Currency in Circulation
The value of the currency in circulation has also increased. The Federal Reserve tracks the value of currency in circulation in the billions of dollars. In 2000, the value of the currency in circulation was over $500 – again valued in billions of dollars. However, by 2020, the value of currency in circulation grew to be over $2,000.
These steading increases over the decades put to rest the idea that cash is not popular among residents of the U.S. A cash economy remains essential for a vibrant economy.