The ECB has announced its intention to phase out the 500 Euro note. Killing off specific denominations of a currency is not unusual but it is often the underlying reason for the action that comes as a surprise to consumers.
In explaining its move, the European Central Bank, the bureau responsible for issuing euro banknotes that are used by all 19 nations in the eurozone, said it was prompted by “concerns that this banknote could facilitate illicit activities.†The 500 euro note is convenient for criminals for laundering money as it is easy to move around unnoticed and are not popular for everyday transactions.
(THE MOVE) WAS PROMPTED BY “CONCERNS THAT THIS BANKNOTE COULD FACILITATE ILLICIT ACTIVITIES.
ECB President Mario Draghi had in the past pointed to the use of these high-denomination bills for illegal purposes and expects the decision to evoke considerable criticism from certain elements of the eurozone populace who have already attacked the bank for their extremely low interest rates.
Not all member nations are convinced the note’s removal is a good one. Both Germany and Austria have voiced their disapproval, linking the move to the ECB’s negative deposit rate on the funds banks park at the institution rather than a deep concern over stopping the cash flow of terrorists’ and drug cartels.
Banknote Changes
This isn’t the first time a currency banknote has been phased out or replaced. Citizens of most countries usually take little notice when changes are made to their money. New paper bills are often placed into circulation to replace those that have worn out through constant usage. And often, currency banknotes are reviewed and alterations made in color, size and design.
Just last month the U.S. Treasury announced that it was portraying Abolitionist Harriet Tubman on the front of the $20 bill and pushing Andrew Jackson to the back. And there has been a strong movement of late to remove the $100 bill from circulation citing its association with crime and the ease of withdrawing large sums of money from banks. According to one financier, the $100 bill has always represented wealth and success and people are often hesitant to use them in shops and restaurants.
