The 500-euro note, the bill of choice for many criminals looking to transfer large amounts of money without the authorities knowing, is being eliminated. The European Central Bank announced today that it’s phasing out the bill to help fight terrorists, drug dealers, and money launderers who preferred the bill because it’s convenient to transport in large sums, widely circulated, and easily convertible.
Roughly 300-billion-euros’ worth of the bills are in circulation, and they won’t be removed immediately. But the European Central Bank will stop producing the bill at the end of 2018. They’ll still be legal tender, but the ECB could take steps to discourage their use, such as requiring banks to ask questions of anyone looking to deposit them.
Officials today acknowledged that the bills are used to finance terrorism — some criminals refer to the note as “the bin Laden” — and pressure to abolish the bill had increased since the attacks on Paris and Brussels.
The bill is one of the largest in the world, worth about $575 in U.S. dollars. Switzerland has a larger one — a 1,000-franc note worth about $1,050 in dollars — but its supply is limited. And the United States got rid of its $500 bill in 1969, along with its $1,000, $5,000, and $10,000 bills.
Criminals aren’t the only ones who liked the bills, though. A 2011 study by the European Central Bank explained that there was a surge in demand for 500-euro bills during 2008 market panic, as some people no longer trusted the banking system and preferred to keep their money in cash.
A Harvard study this year actually did the math on how many of the bills you could stuff into a sack. A cool $1 million worth of 500-euro notes weighs just five pounds, and fits into a small bag. By comparison, $1 million worth of the next-largest denomination (200-euros notes) would weight two and a half times as much, and $1 million worth of $100 bills would weigh 22 pounds and take up an entire suitcase.
But some believe even that is a bit too easy for criminals to use. Former Treasury secretary Larry Summers has argued that the U.S. should eliminate the $100 bill, and he implied that the use of the $50 bill should be examined as well. In which case, criminals in the States may need to figure out how many Tubmans they can carry at once.