It's All About the Benjamins

When U.S. rapper Puff Daddy released his hit single “It’s All About the Benjamins” in 1997, he was way ahead of his time. Back then, the $100 bill the song refers to was only the third most popular dollar note, trailing the ubiquitous $1 dollar note and the $20 dollar note in terms of circulation, but 20 years and several nicknames later, Diddy’s prophecy would eventually be fulfilled.

According to Federal Reserve data quoted by the IMF, the $100 bill became the most circulated currency in the world in 2017, overtaking the $1 bill for the first time ever. What’s even more interesting though, is the fact that an estimated 80 percent of the 13.4 billion $100 notes in circulation are held outside the United States, compared to “just” 60 percent of all 43 billion U.S. dollar bills.

So what makes the $100 bill so popular in and especially outside the United States? Apart from political and monetary instabilities driving demand for U.S. dollars, especially in large denominations, as a safe-haven currency, i.e. a stable and secure asset, Harvard University’s Kenneth Rogoff has another theory: “Worldwide, high-value currency notes are mainly used to avoid taxes and regulation, and for illegal activity,” he observes. “Apartments and houses in major cities all over the world are paid for with suitcases of cash every day, and it is not because the buyers are afraid of bank failures.”