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Steven Mnuchin explains why nearly $1.5 trillion worth of $100 bills reportedly disappeared

Blair Shiff

Almost $1.5 trillion of the world's cash, with U.S. $100 bills making up a great deal of it, is reportedly unaccounted for. So what happened to the money?

"Literally, a lot of these $100 bills are sitting in bank vaults all over the world," Treasury Secretary Steven Mnuchin told FOX Business' Lou Dobbs during an interview on Tuesday.

Mnuchin pointed to the negative interest rates causing people to turn to American dollars as a solid investment.

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"The dollar is the reserve currency of the world, and everybody wants to hold dollars," Mnuchin said on "Lou Dobbs Tonight." "And the reason why they want to hold dollars is because the U.S. is a safe place to have your money, to invest and to hold your assets."

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Mnuchin said it's interesting that, in a increasingly digital world, "the demand for U.S. currency continues to go up."

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"There's a lot of Benjamins all over the world," Mnuchin said.

There are more $100 bills – also known as C-notes – in circulation than $1 bills, according to data from the Federal Reserve, which found there are more $100s than any other denomination of U.S. currency. The number of outstanding bills featuring a picture of Benjamin Franklin has about doubled since the start of the recession.

In 2018, the Federal Reserve Bank of Chicago illustrated a correlation between low interest rates and high currency demand, though it also noted outside factors could help explain swelling demand.

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The bank estimates that 80 percent of all $100 bills last year were actually in circulation in foreign countries. It explained that residents in other countries, particularly those with unstable financial systems, often use the notes as a safe haven.

FOX Business' Brittany De Lea contributed to this report.

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