The economic downturn has shown, again and again, that global investors and foreign governments turn to the safety of U.S. Treasury securities in a crisis. The same apparently goes for other foreigners, who socked away $100 bills at a rapid pace after the financial crisis struck in late 2008.

As much as two-thirds of U.S. currency in circulation is held abroad, according to Federal Reserve estimates. In prepared testimony for a House subcommittee hearing this afternoon, Louise Roseman, director of the Fed’s Division of Reserve Bank Operations and Payment Systems, laid out the stats: The foreign component of currency holdings “increased significantly” starting in the late 1980s. In the 1990s, U.S. currency in circulation world-wide grew at a 7.7% average annual rate primarily due to increases in foreign demand and a demand surge at the end of the decade, she said. But annual growth rates began to fall in 2001 and fell below 1% in 2008, through August.

Among the reasons for the slower demand over the past decade, Ms. Roseman said: “the value of the dollar decreased against many other major currencies; international markets gained trust in their own economies and national currencies; electronic payments displaced some cash usage; and the effect of the recent recession.”

That changed in September 2008, when Lehman Brothers and AIG failed and financial markets went into a downward spiral. U.S. currency growth went from 0.8% year-to-date through August 2008 to a whopping 7.7% for full-year 2008. Strong growth continued in 2009, pushing currency in circulation to almost $900 billion by the end of that year from $775 billion at the end of 2007. As of May 31 of this year, the value of U.S. currency in circulation stood at $902.2 billion, or roughly 96% of total currency and coin in circulation.

The source of the growth was mostly foreign. Domestic demand for U.S. currency increased in the fall of 2008, as Americans rushed to their banks, but the federal government’s expansion of FDIC deposit insurance and other actions quickly brought it back to normal levels.

With the higher international demand, the Fed asked the Bureau of Engraving and Printing (which executes printing orders from the central bank) to accelerate production of $100 notes during the financial crisis to meet the global needs. Most of that currency remains in circulation today, the Fed says, even though demand for $100 notes from abroad has returned to normal levels.