Fed Deep Dives into Data to Report on Demand for US Banknotes Post-COVID

Last month, the Board of Governors of the Federal Reserve System published an International Finance Discussion Paper on the demand for US banknotes at home and abroad. It was authored by Ruth Judson, a staff economist.

The article examined in detail the question that no one has the absolute answer to – what is happening and will happen, to cash? Given that the US dollar is the world’s foremost international currency, and it is used as a medium of exchange and store of value outside its own borders far more than any other currency, an in- depth study of its past and current trends, both nationally and abroad, should give an interesting perspective on the matter.

The author begins by noting that in principle, physical currency should be disappearing given that payments are increasingly digital, with new technologies emerging rapidly and governments increasingly restricting the use of large denomination notes to reduce crime and tax evasion.