New $100 bill coming next year

New $100 bill

Beginning February of 2011, a new U.S. $100 bill will be introduced in to circulation. This new bill follows updates to the $5, $10, $20 and $50 bills that began in 2003. The reason for the changes and updates are for security purposes to defend against counterfeiters. Most advanced nations update their currencies every so often to try to stay ahead of the cat and mouse game of counterfeiting. However, when it comes to the USD, this task is not nearly as easy to do.

The U.S. dollar is more widely circulated than any other currency, by far. For many nations, it is preferred over the home currency and in some countries it is the adopted home currency. In fact, it is estimated that out of the $6.5 billion worth of $100 U.S. bills, only about 33% of them are actually circulated within the United States while the majority are outside the U.S. Therefore, changing any USD bill will likely take years for the old ones to leave circulation.

To use a comparison, the Canadian currency was also changed in recent years. It first started with replacing $2 bills with $2 coins, called “Toonies”. Then the $5, $10, $20, $50 and $100 bills were updated. Within just 2-3 years of each change, the vast majority of the bills of a given value were of the new design. It is a relatively quick transition because most Canadian dollars are circulated within Canada. The CAD is not that popular internationally and in fact, many (probably most) Canadian businesses that deal internationally will deal in USD and just convert them once they are in the company’s possession in Canada.

However, if the Canadian dollar was popular internationally and particularly in developing countries like the USD is, then this transition would take many more years than it does. Also, in the U.S., the most counterfeited bill is actually the $20 bill, but outside of the U.S. it is the $100 bill that is most widely counterfeited. Since a good amount of counterfeiting is done in developing countries which have a higher level of government corruption, they may be consciously slower to circulate the new, harder to copy bills and remove the old ones from circulation.

The reason they introduced this new bill now even though it will only be launched in early 2011 is to educate the public and really, the world about how to check the special markings that will distinguish it as a real bill and not a fake. Even the introduction needed to be done well ahead of the launch because the USD is so widely used around the world that it will take a lot longer than other currencies for people to learn about the changes. Eventually, counterfeiters will also likely be able to copy these new bills and the cat and mouse chase will continue.