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 35 billion, a chart shows.
The strong signal suggests that U.S. citizens are now withdrawing far 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.
Back then, U.S. currency in circulation rose from $588.6 billion on Dec. 15, 1999, to $610.9 billion by Dec. 22. That’s an increase of 22.3 billion, far less than seen from March 11-18. Over the weeks from Nov. 3, 1999, however, the Y2K spike saw a total increase of over 55 billion.
On a weekly basis, the March 11-18 rise looks to be possibly the biggest since at least 1975 – the earliest date shown in the Fed data.
The news was tweeted by monetary economist John Paul Koning with a chart illustrating the St. Louis Fed’s data.
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 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 fact that physical money represents the “dirtiest” form of currency exchange between two parties, driving the narrative further for blockchain-based digital value transfer.