
European Central Bank to withdraw €500 note - tetraodonpuffer
http://www.bbc.com/news/business-36208146
======
biztos
I get that large bills provide more opportunities for conterfeiters, money
launderers, and other (in the eyes of the State) bad actors, I am surprised to
see how low the line is being drawn. In the US they only go up to $100.[0]

The worrying thing is simply that it's in the State's interest to have every
monetary transaction be electronic and thus entirely traceable, also in
aggregate; whereas it's in my interest to be able to spend (or loan, or give
away) my money privately.

The lower the available currency denominations, the more this balance shifts
towards the State.

[0][https://www.treasury.gov/resource-
center/faqs/Currency/Pages...](https://www.treasury.gov/resource-
center/faqs/Currency/Pages/denominations.aspx)

~~~
toomuchtodo
You should be worried less about traceability, and more about negative
interest rates turning you into an economic slave in the pursuit of
unattainable growth.

A lot easier to chip away at your savings if they're bits in the bank versus
notes under the mattress.

~~~
notahacker
A lot easier to chip away at savings if they're under the mattress losing
value rather than in a savings account earning above-inflation interest

~~~
toomuchtodo
Show me a savings account in a developed country earning above inflation
interest.

~~~
jhallenworld
[https://www.fnbodirect.com](https://www.fnbodirect.com) has .95% for savings
(they used to have 6%)

Inflation for March was .85%.

~~~
tiatia
You must be f. kidding?
[http://blog.geckoresearch.com/content/11658](http://blog.geckoresearch.com/content/11658)

~~~
toomuchtodo
Also: [http://www.wsj.com/articles/rising-rents-outpace-wages-in-
wi...](http://www.wsj.com/articles/rising-rents-outpace-wages-in-wide-swaths-
of-the-u-s-1438117026)

------
claudius
Okay, I understand that there are not _that_ many usecases for a 500€ note and
whenever I paid something >500€ in cash, I appreciated the flexibility of 50€
notes. But that Harvard Kennedy School also asked for the withdrawal of £50
and $100 notes? Again, $100 is probably not that useful, 100€ notes were
usually a nice touch for Christmas gifts by parents/grandparents.

But £50? ATMs tend to give me a bunch of 50€ notes and I like them. Everybody
likes them. They’re not too large that you can still buy gum with one and not
too small that your wallet is all cluttered up. I understand that £50 is
slightly more, but not that much more to go down to £20/20€ for it.

~~~
Maultasche
I noticed while living in Germany (this was just before the euro was
introduced) that Germans love to pay for things in cash.

I was in line at Media Markt waiting to buy something and was a bit surprised
to see the person in front of me pay for a computer with cash. It cost 2200 DM
(this would have converted to 1100 euros), and he gave the cashier two 1000 DM
notes and a 200 DM note. I was surprised to see so much money in cash form,
but the cashier acted like it was normal.

I was told that transactions of this sort were common in Germany. Someone I
knew told me they had witnessed someone paying for a car with cash, and
although this was more unusual, it was not unheard of.

When I cashed out my bank account, I ended up with a 1000 DM bill, with a nice
picture of the Brothers Grimm on it. It was weird to have so much money in one
bill. Deutschmark notes became larger as the demonination increased, so that
1000 DM bill was huge. It didn't fit in my wallet, that's for sure.

I wonder if Germans still love paying for high value items in cash. I could
certainly see them using 500 euro bills for purchases.

~~~
jpetso
In all honesty, I think the messed-up banking system in North America distorts
people's expectations. How is it a thing that in order to buy a laptop online,
I am limited to:

* credit cards, which are only available from for-profit companies that can and will deny a subset of citizens with bad or non-existent credit rating (which itself is provided by other for-profit companies with intransparent, unaccountable data collection & evaluation practices) and charge substantial fees to the vendor

* or, if I'm lucky, wire transfer or cheques - the former being a blatant rip-off with unreasonably high fees, the latter a physical piece of paper that I have to send by snail mail, neither of them instantaneous, both with bank delays.

I think it's quite reasonable to expect from companies at least one payment
method that's available to anyone, under any financial circumstances, with no
or only marginal cost to the buyer and near-instantaneous transaction time.

In Europe, this has so far been cash for physical retailers. Websites often
allow direct bank account transfers, which are possible because free,
standardized, non-paper-based direct transfers from one bank account to
another bank account are a thing - as opposed to North America where you have
certified cheques, void cheques, email transfers, wire transfers, PayPal,
Western Union, etc. These are all half measures in one way or another,
covering up the lack of a universally available & universally accepted payment
system.

I'll be the first one to appreciate a move away from cash, but let's make sure
people have a viable alternative, yes?

To be fair, there are things like Visa/Mastercard debit cards which lighten
the load a bit. They're still a middleman solution however, relying on
contracts with individual payment providers and taking a substantial cut from
the vendor on top of what a standardized, direct inter-bank network should be
able to do. Cash (as well as SEPA, if short waiting periods are okay) doesn't
suffer from that.

------
noja
_Senior ECB officials said at the time [in 2016] that they needed more
evidence that the notes facilitated criminal activity._

So did they find the evidence or not? The article omits this information.

------
arprocter
Surprised it took them so long to get rid of them.

From an article[0] I found from when the UK decided to stop dealing with 500s

"many British gangsters stored their spoils in the form of €500 notes. While
£1m weighs 50kg in £20 notes, the same value weighs only 2.2kg in €500 notes.
This has made life easier for a growing number of criminals, since the euro's
introduction in 2002. Should you wish, for example, you can swallow €150,000
in €500 notes, or hide €20,000 of them a cigarette packet"

[0][http://www.independent.co.uk/news/uk/crime/goodbye-to-the-
no...](http://www.independent.co.uk/news/uk/crime/goodbye-to-the-note-of-ill-
repute-1972192.html)

------
_nalply
«Swiss 1,000-franc note here to stay, says national bank. Switzerland vows to
keep world’s most valuable single-denomination note despite ECB moves to pull
its €500 note to help fight crime and terrorism.»

[https://www.theguardian.com/business/2016/feb/16/1000-swiss-...](https://www.theguardian.com/business/2016/feb/16/1000-swiss-
franc-note-here-to-stay-swiss-national-bank)

Fr. 1000 is around $1000. I got my car in exchange for fifteen of these purple
beauties five years ago.

------
boulos
Now let's see if the 1000 CHF note is still here to stay
([https://www.theguardian.com/business/2016/feb/16/1000-swiss-...](https://www.theguardian.com/business/2016/feb/16/1000-swiss-
franc-note-here-to-stay-swiss-national-bank)). I assume that the 1000 CHF note
is only sort of useful, because you can't launder it nearly as easily. With a
500 Euro note, you can spread them around and deposit them in many countries.
With a pile of 1000 CHF notes, someone is going to notice.

------
TazeTSchnitzel
Supposedly they were nicknamed 'Bin Ladens' in some places, due to the
association with money laundering. I have no idea how true that is.

Something we do actually know, though, is that Osama himself had two of them
sewn into his clothing at the time of his death.

The €500 note was one of the world's most valuable banknotes. There's no
denomination anywhere near it for, say, dollars or pounds or whatever.

~~~
ArturSoler
As far as I know, the "Bin Laden" nickname was because "everyone knew that
they (he) existed, but nobody knew where they (he) was (were) / nobody had sen
them (him)".

------
SeanCrawford
In Canada, when I needed over a $1,000 to pay my dentist I happily carried a
$1,000 note.

Of course, I had to order it from my bank and wait until the next time they
had money being shipped in. It's a happy memory that I can never repeat,
because the $1,000 bills are no longer made here: (or in the U.S.)Although we
haven't declared war on drugs we do have concerns about crime.

------
jmedwards
From Wikipedia:

> The Serious Organised Crime Agency claimed that "90% of all €500 notes sold
> in the UK are in the hands of organised

crime", revealed during an eight-month analysis. Seems like the mere existence
of the 500 euro notes and those stupid enough to use them presents a pretty
good profiling opportunity.

~~~
dragonwriter
> Seems like the mere existence of the 500 euro notes and those stupid enough
> to use them presents a pretty good profiling opportunity.

But...it doesn't. 90% of those sold being in the hands of organized crime
doesn't mean 90% of times a 500 euro note is used it is used by organized
crime. If most of it is used to store reserves of organized crime, it might
make up a very small fraction of all _exchanges_ of the notes (and even
smaller if you exclude exchanges between organized crime participants.)

So, it might not be very a good profiling opportunity.

------
rtz12
The ECB is most probably one of the biggest threats to freedom that we
currently face.

~~~
toomuchtodo
I wouldn't go that far, but removing large notes is definitely a worrying sign
of further ratchets in negative interest rate policy.

