Bye bye banknote

Usually news about banknotes focusses on their design (we’re getting Turner and the fabulous “Fighting Temeraire” on our new £20 note in 2020), their devotees (the New Zealand $5 note has just been named Banknote of the Year for 2015) or their general demise (we’re all going to hell in a hand-basket, and funding the trip with bitcoins).  But on 4 May the European Central Bank dropped something of a bombshell when it announced that from the end of 2018, it will no longer produce the €500 euro note, although the ones that are already out there will remain legal tender.  The rich purple paper has long – police maintain – been a favourite with criminals, who value its, well, value: you can carry a lot of money in a few notes.  A million euros in €500 notes weighs just 2.2kg, and fits into a laptop bag.  The ECB’s more restrained reasoning is that there are “concerns that this banknote could facilitate illegal activities”.  According to ECB statistics, the €500 note accounts for 3% of the total number of banknotes in circulation, but 28% of the total value.

In the UK, of course, we took action on this some time ago: after a large money laundering case involving bureaux de change and sacksful of the note, the €500 euro note was banned from sale in the UK on 20 April 2010.  You can still tip them in here – sell them to a bureau de change, or deposit them into your bank – but you can’t get them out.

The €500 note is actually only the third most valuable in the world, among notes that are in regular circulation: top spot goes to the Swiss 1,000 franc note, followed by the Singapore $1,000 note.  The UK’s most valuable note is actually quite small – the £50 – but there are those, among them the former boss of Standard Chartered, Peter Sands, who think that this note too should be withdrawn, to discourage cash-in-hand tax evasion by builders and plumbers.  Mind you, I have to say that my real challenge here in Cambridge is not finding a £50 note, but finding a plumber.

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6 Responses to Bye bye banknote

  1. Sue Shelley says:

    Great article Sue! Had to laugh at Peter Sands comment….ahhhh….save us from the scourge of the builders and plumbers doing “foreigners”….thank goodness we now know how to resolve the global tax evasion crisis 🙂

  2. Thanks for the comment, Sue, and welcome to the blog. Yes, it’s always a hoot when people have a one-dimensional view of an issue. In fact, I’m preparing another blog post about another gentleman with rather a blinkered view of things…
    Best wishes from Susan

  3. Claire says:

    I agree that finding a plumber or ordinary handyman is the hardest! Even in Belgium. They are not interested in small jobs. That certainly encourages the more eager illegal ones… And yes, 2.2 kg, even I can carry that. Sometimes my handbag feels that heavy (sadly not from the money).

  4. You’re absolutely right on both counts, Claire – elusive plumbers and heavy handbags!

  5. Pingback: A bum note | I hate money laundering

  6. Pingback: Purple, portable and prized | I hate money laundering

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