The European Union will ditch the €500 bill. The European Central Bank (ECB) decided to stop issuing the high-value note by the end of 2018 in a bid to tackle money laundering and the financing of drugs and terrorism.
“The other denominations—from €5 to €200—will remain in place,” it said.
The circulation of €500 bill—previously been dubbed the “bin Laden“—has increased dramatically from 2002, sparking fears the bill was being used to finance terrorism. The €500 bill now makes up just under a third of all cash in circulation in the EU.
French finance minister Michel Sapin had previously argued that the €500 bill was “used more to conceal activities than to buy things, more used to facilitate dishonest activities than by people like you and me to get a bite to eat.”
The UK had withdrawn the €500 bill from sale in 2010 on the grounds that they were predominantly being used by criminals. A 2010 report by the British police claimed that only 10% of €500 notes were being used for legitimate purposes.
High-currency banknotes such as €500 bill are preferred by criminals as they’re easier to transport. A recent study by Harvard’s Kennedy School illustrated why with briefcases; criminals that use $20 bills need four normal briefcases to transport $1 million in cash, while those using €500 notes could fit the same amount of money in a small bag.
The axing of the €500 bill is unlikely to have much of an impact on most citizens in the 19-member euro zone—56% of EU citizens claim to have never used one. And criminals who have relied on them are likely to jump onto another high-currency note, such as the 1,000 Swiss-franc bill—the most valuable banknote in Europe.
The Swiss National Bank rejected calls to phase out the 1,000-franc bill, arguing the high-currency bank note had little impact on combating crime. In fact, some Swiss MPs have called on the central bank to go even further and create 5,000-franc notes to “save the privacy and freedom” of citizens.
The Swiss MPs echo criticisms from Germans and Austrians, where cash is king and plans to restrict cash payments have been met with fierce opposition. Many people want to protect the anonymity that comes with paying with cash.