₦airaland Forum

High-Denomination Banknotes
The Subcommittee has asked for our views on the advantages and disadvantages of issuing U.S. banknotes in denominations higher than $100. We considered how a higher-denomination note could enhance the attractiveness of using U.S. currency and could provide savings by reducing printing, processing, and transportation costs. These benefits were weighed against the concern that high-denomination banknotes could facilitate money laundering and drug trafficking.

Demand for U.S. currency and for specific denominations is driven by many factors, including the needs for a medium of exchange and a store of value. Domestic demand for currency is largely transaction-oriented and is influenced by income levels, prices, and the availability of alternative payment methods. Increases in domestic demand for high-denomination banknotes ($50s and $100s) have been generally modest because Americans tend to use checks, credit/debit cards, or other noncash forms of payment for larger-dollar transactions. The introduction of a higher-denomination banknote saves printing and processing costs, but only to the extent that the public shifts its demand from $100s to larger-denomination notes. Even if such a shift occurred, any savings would likely be minimal without a substantial reduction in the demand for other notes -- $1s through $20s account for about 85 percent of the production of the BEP and over 90 percent of the Federal Reserve's processing.

International demand for U.S. currency is influenced largely by the stability of foreign currencies, the confidence in the U.S. dollar as a stable currency backed by a strong economy, and the lack of any recall of U.S. currency. As I mentioned earlier, approximately two-thirds of U.S. currency is held internationally, but about three-quarters of the $100 notes in circulation are held overseas. Foreigners use high-denomination U.S. banknotes primarily for savings, but we also find that countries with transitioning economic and political environments use U.S. currency as a medium of exchange. Ultimately, we believe the strength and stability of our economy will continue to be the primary factors influencing international demand for U.S. currency. Thus, the introduction of a high-denomination U.S. banknote would likely produce minimal increases in demand for U.S. currency.

Although there are some benefits associated with a high-denomination banknote, the law enforcement community has expressed concern about the disproportionate use of large-denomination banknotes for illicit activity including money laundering, drug trafficking, and tax evasion. In addition to making large-value transactions more efficient, a high-denomination note could inadvertently facilitate illegitimate transactions by making them more efficient as well. Such concerns prompted the Canadian government's recent proposal to cease issuing its $1000 banknote.

In weighing the marginal benefits of introducing a high-denomination U.S. banknote against law enforcement concerns about illegitimate activities, we do not foresee any immediate need to issue high-denomination notes.

Even the US Government knows that higher denominations can save printing costs but weighing it against its odds, they chose not to go for it, Sanusi is not a genius after all.

ifeci: Pls mr sanusi, We know that high denomination currency results in ease of corruption and weakening of banking system. In addition to this ease, cash transactions are by definition, non-traceable, since unlike in the bank, they leave no footprint. These properties of high denomination currency make it the preferred currency for storing black money which fosters parallel economy. This also means that people who steal Government money can store large chunks at home without traces. Additionally, mr sanusi, the introduction of high denomination notes will grossly reduce d use of the banking system as large ticket transactions can now be done without the need for banks; of which the direct result is, poor credit formation and inadequate capital supply to the economy.

Good points u hv raised here my brother, good points! in as much as we want to reduce the cost of producing currencies, wots the use if that money saved is still going to be embezzled and also aid the embezzlement of more funds by politicians? and also the issue of parallel economy which is sure recipe for tax evasion, etc.

where did we get it wrong, how did we get this man into power?this una president is so lame! he throws his weight on minor subjects but when it comes 2d main problems facing the country , the guy runs into hiding, he can do better than cassava bread, he can pay pple to think for him rather than waste money on pple like Beaf to come here and be typing rubbish!

who is this shitmessshymmex? is he another Beaf incarnate? just wondering.

Omo, dis is the fastest way to study abroad and get a job and hopefully Government contracts in Naija o!, just start your own mushroom militancy group, threaten the GVT that u will bomb Oil pipelines(u can buy a few carbide/knock out for the assignment)& I tell u, this lame Gvt will shiver & yield to your demands like they've always done, after all, na them carry their mouth dey invite terrorists to come sign up for Amnesty.

Soludo is better jor!

[b]Beaf:[/b]How do you establish boundaries in a democracy?
Common sense says that civilised people would establish boundaries through the law courts; an uncivilised person might see such actions as foolish, though.

So in essence, you are supporting this move by your president?

I don't care what audio tape is circulating all i want is where are the cabals? You guys want Farouk to be hanged [b]for only N3m [/b]but you are saying nothing about the over 1 trillion Naira looted through oil subsidy.

I know the MD of one of the indicted companies, the guy just bought a powerful mansion, a 2011 Toyota Landcruiser and a Toyota VENZA.

Let us deal with the real issues and leave farouk in the hand of the Law.

Oga where did you jump out from? its 3million dolls mehn! not N3m! did u just come bck from the moon?