500 euro note exit in UK?
A decade after its introduction, the 500 euro bill has taken a leading role in the world of dirty money. An internal Bank of Italy report warned last year about the mafia’s use of the note, saying it was just adding to the national problems of tax evasion. It is globally the money launderers favorite weapon of choice; the 500 euro note. The largest US dollar denomination is $ 100, so the 500 euro note represents around 5 times more value. And what is more important: around 5 times less weight and less volume if you smuggle dirty cash. A regular cereal box can easily hold 300,000 euros. Try store $ 300,000 in a cereal box!
During raids law enforcement officers have been seizing more and more stash houses full of euros, with the 500 euro note in a leading role. Estimates vary but it is commonly accepted that 80% of 500 euro notes are only used for shady business and cash stashes. The UK based Serious Organised Crime Agency (SOCA) says 90% of the 500 notes sold in the UK are in the hands of organized crime. A SOCA deputy director said 500 euros had become the currency of choice for gangs hiding their profits. SOCA says that an eight-month analysis of movements of the note in the UK revealed that it was almost exclusively used by money launderers shifting cash for major crime gangs.
With this pressure from law enforcement, exchange offices in the UK have stopped selling 500 euro banknotes because of their use by money launderers. The impact of this measure is not predictable but it will be more difficult to change smaller street money for larger denominations. Or does it? It will probably result in a new market for money launders. The 500 euro note obviously is not illicit itself; changes to larger denominations will probably go underground now in the UK, resulting in less CTR’s filed by bureaus de change. Let’s wait for the UK’s assessment of the effectiveness of the ban.
Remember the Canadian $1000 note? That was withdrawn because of crime (money laundering) concerns. The eurozone countries have announced no plans to withdraw the 500 euro note as of yet. Just a matter of time?
http://news.bbc.co.uk/2/hi/uk_news/8678886.stm
I think having high denomination currency is a bad thing in terms of value and laundering.
But if inflation skyrockets then you have no choice.