A seemingly simple idea to withdraw high denomination banknotes stands a very good chance of turning into reality. Peter Sands, the former chief executive officer of British bank Standard Chartered PLC, has published a paper arguing that scrapping large bills would make it much harder for money launderers and human traffickers to transport massive sums of money. Simple math shows that it would take four normal briefcases stuffed with cash to move around one million dollars in $20 notes, weighing about 100 pounds (over 45 kilograms). The same amount in $100 bills would weigh only 22 pounds (less than 10 kilograms) and could easily fit into a single briefcase. The equivalent of one million dollars in 500-euro banknotes, in turn, may be transported conveniently in just a small bag. “It’s not often that you come across a policy proposal that is simultaneously easy-to-implement, has a powerful positive impact, and very limited downside. Eliminating high denomination notes is one such idea,” Sands states in his research.
Such practice has already proven itself to be an effective solution in a number of countries. For example, Canada stopped issuing C$1,000 bills back in 2000 while Singapore phased out its S$10,000 note in 2014. At the same time, big-money advocates, including ECB President, claim that large denomination banknotes, in the words of Mario Draghi, fulfill “an important role as a store of value and are a last resort for storing assets both within the euro area and abroad.”
