Journalist Oliver Bullough, author of "Everybody Loves Our Dollars: How Money Laundering Won," discusses the paradox of increasing physical cash, especially $100 bills, in circulation even as daily cash transactions decrease. He attributes this phenomenon to the use of these bills in money laundering by criminal enterprises, making illicit activities profitable.
Money laundering is a massive global business, estimated to be between $2 trillion and $5 trillion annually, representing 2% to 5% of global GDP. These figures, while difficult to verify due to the nature of the activity, have remained consistent since the 1990s, suggesting that efforts to combat money laundering may not be keeping pace with its growth.
The global anti-money laundering (AML) compliance legislation, initiated in the late 1980s by the Financial Action Task Force, costs an estimated $200 billion annually. This substantial amount could, hypothetically, address issues like world hunger and provide clean water and sanitation globally with approximately $50 billion left over.
While regulated financial institutions are often scrutinized, the true scale of illicit financial flows is much larger. Global cash smuggling, predominantly in $100 bills, amounts to hundreds of billions of dollars annually. This is dwarfed by trade-based money laundering, where value is moved through misinvoicing goods rather than actual money, making it even harder to estimate and track.
