All About the Benjamins: US Dollars Held Abroad

Roughly 1 in 1.72 (58%) American adults own a credit card, but an additional $620 billion in cold, hard currency is in circulation. That’s a lot of money—more than $2,000 per American in fact—but most of it actually does not circulate in the United States. Instead, a report from the United States Treasury Department (PDF) estimates that roughly 370 billion of those dollars are held abroad.

Dollars are often found in countries with unreliable currencies and volatile political conditions; the banking systems in such countries are often underdeveloped and unstable, making US dollars the safest available way to store value. In Russia, for example, citizens imported an average of roughly $2 billion a month in US dollars in a two-year period, between 1994 and 1996, while Mexico sees inflows of $600 to $800 million a month.

In all, the report estimates that of the US dollars held abroad, 1 in 2.5 are held in Europe and the countries of the former Soviet Union. Another 1 in 4 are held in Latin America, 1 in 10 in Africa, 1 in 10 in the Middle East, and 1 in 6.67 in Asia.

Though $100 bills are significantly less common in the United States than $20 bills, they are much more popular abroad. The Treasury estimates that $100 bills account for around 1 in 1.45 bills in circulation, and about 1 in 1.51 $100 bills is held outside the US.

Foreigners are not likely to hold large-value bills as pocket money for spending because they can be difficult to convert. Instead, the large-denomination bills are held as savings. Indeed, though the Treasury Department’s report estimates that more than half of all $20 bills are held abroad (the denomination most convenient for immediate purchases), that proportion is still significantly smaller than the proportion of hundred dollar bills squirreled away beyond the US borders.

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