In the midst of a government shutdown over federal spending, a new $100 bill began circulating Tuesday. At least we assume it did: The U.S. Treasury, like much of the government, couldn’t be reached for comment, and no one is making change with a crisp, new hundred this morning. (Update: The Fed confirmed late Tuesday night that the new $100s went into circulation without a hitch.)
The Series 2009 $100 note is more expensive to print than the last version—12.7¢ per bill vs. 7.8¢ for the older style—but it’s designed to be harder to counterfeit and easier to authenticate. The hundred note still features Ben Franklin on the front and Independence Hall on the back, along with more colorful illustrations and hidden text and pictographs that reveal themselves only under certain conditions.
If now feels like a bizarre time to begin printing new, more expensive money, rest assured that the $100 bill plays an essential role in the U.S. economy. Although most Americans are unlikely to use the new note regularly, if at all, the hundred is by far the largest store of value for all circulating U.S. currency.
At the end of 2012, there were about $10 billion in singles in circulation, according to the Federal Reserve. There were $863 billion in hundreds making the rounds—more than three-quarters of the value of all U.S. notes. Although hundreds are the most commonly counterfeited bill, they have grown significantly more important to the economy over the last 20 years.
Bill Adams, senior economist at PNC Financial (PNC), estimates that from 1992 to 2012, the share of the U.S. gross domestic product accounted for by hundred-dollar bills doubled. Today, he says, hundreds represent close to 6 percent of gross domestic product.
Most of that currency is probably not in the United States. In 2010, Fed Chairman Ben Bernanke noted that up to two-thirds of all hundred notes are circulating abroad.
“The hundred is extremely popular in other countries,” says Tu Packard, a senior economist at Moody’s Analytics (MCO). “In countries that have high inflation, it’s a more trusted medium of exchange.” Where hundreds are concerned, she adds, “the fresher the bill, the better.” Older, beaten-up currency is often frowned upon in countries that have seen their own currency devalued quickly. Packard recalled having an easier time exchanging a hundred-dollar bill in Kyrgyzstan than her travel companion did because her own note appeared newer and less-weathered.
The hundred typically has a longer lifespan than other bills because it is used less frequently. The average hundred circulates for about 15 years, according to the Fed.
The new bill is also arriving a little late. It was supposed to go into circulation in February 2011, but a production problem caused delays. Its predecessor arrived on March 25, 1996—80 days after the last government shutdown.