From March 11 to March 18, dollar banknotes in circulation shot up from around 1.809 trillion to 1.843 trillion, an increase of almost 2 percent, the data shows. The increase was noted Sunday by economist John Paul Koning.
U.S. currency in circulation has experienced its largest percentage increase in over 20 years, according to data from the Federal Reserve Bank of St. Louis.
The data is the first strong signal, beyond scattered anecdotes, that U.S. citizens are now withdrawing more cash than usual from banks and ATMs amid concerns over the effects of the coronavirus pandemic.
The surge is the biggest since late 1999, when fear of a global digital systems crash caused by a rumored glitch in numerical dates – the so-called «Y2K bug» – sparked a frenzy of withdrawals and panic buying.
Based on the weekly change, the week ending Dec. 22, 1999, saw a 3.78 percent rise, while the week ending March 18, 2020, saw an increase of 1.92 percent.
Currency in circulation includes paper currency and coin held both by the public and in the vaults of depository institutions.
The increase comes as the global outbreak of the deadly coronavirus (COVID-19) continues to worsen in many nations, and with the health authorities advising social distancing measures and minimal contact with surfaces that might be contaminated with the virus.
The pandemic has brought new attention to the idea that physical money represents the «dirtiest» form of currency exchange between two parties, driving the narrative further for digital value transfer, blockchain-based or otherwise.
US Commerce Dept. Wants to Survey Firms on Cross-Border Crypto Usage
The U.S. Commerce Department’s Bureau of Economic Analysis (BEA) has proposed a rule change to a benchmark survey that would require all U.S. financial services companies to identify if they engaged in cross-border services related to cryptocurrency.Alongside wider rule changes to the «BE-180 Benchmark Survey of Financial Services Transactions between U.S. Financial Services Providers and Foreign Persons» – a mandatory questionnaire BEA issues every five years – the crypto proposal would, if implemented, give Commerce Department statisticians a more precise look at the prevalence of foreign crypto activity.
The survey will be posed to brokerages, private equity funds, custody services, financial advisories and the many others included in BEA’s sweeping definition of «financial services.» BEA estimates that 7,000 respondents will reply.
«BEA will add a single question asking respondents to identify, of their 2019 cross-border financial services reported in the required transaction categories, any that were related to cryptocurrency activities”, the rule change read in part.
That question, however, will not gather individual transaction information, said BEA Services and Surveys Branch Chief Christopher Stein. A brokerage that facilitates the cross-border trade of crypto assets would only indicate that it did so, leaving out more granular details like transaction amounts.
«We are not collecting data related to the physical currency asset,» Stein said. «We are not collecting separate dollar amounts related to these services, we’re just emphasizing that, for example, a facilitating-type brokerage fee associated with the currency transaction is within the scope of the survey.»
When BE-180 was last held in 2015, the survey did not mention cryptocurrency transactions, but Stein said they were nonetheless included within the survey’s scope. The proposed definition amounts to a bureaucratic clarification as cryptocurrency develops.
«It’s a new and evolving area in the financial services market, and the benchmark is an opportunity to ask more information and clarify survey requirements,» he said.
The proposal package said the rule changes will «allow BEA to more closely align its statistics with international guidelines.» Its data will be used to «monitor» U.S. and international financial services, promote trade and help «U.S. businesses to identify and evaluate market opportunities”, the package proposal said.
The comment period runs through April 27, 2020, according to the proposal.
