This is very profitable for the United States. Currency is printed by the Treasury and issued by the Federal Reserve. The central bank pays the Treasury for the cost of production — about 10 cents a note — then exchanges the notes at face value for securities that pay interest. The more money it issues, the more interest it earns. And each year the Fed returns to the Treasury a windfall called a seigniorage payment, which last year exceeded $20 billion. To meet foreign demand, the Fed has licensed banks to operate currency distribution warehouses in London, Frankfurt, Singapore and other financial centers. In March, largely because of the boom in $100 notes, the value of all American notes in circulation topped $1 trillion for the first time.
In the United States, research suggests that the spread of electronic payment technologies is steadily reducing the share of payments made in cash. Drivers use E-Z Pass at toll plazas for roads and bridges. Commuter’s swipe stored-value cards at turnstiles. Christmas stockings are stuffed with gift cards. Mr. Zazula, the restaurateur, made his decision in 2009, inspired by a flight on American Airlines, which had just introduced a no-cash policy.
He said that 85 percent of his customers already paid with credit cards, and taking cash to and from the bank was a nuisance and security risk.
Two years later, Mr. Zazula said he had no regrets.
“You still have some people that are outraged that we won’t accept cash,” he said, “but most of it is a show because they end up having a credit card.”