The Question: Why is the ECB getting rid of the € 500 note? – Irish Times

Farewell, € 500 note, We Hardly Knew already. ACCORDING to reports coming out of the European Central Bank this week, Mario Draghi and co Have DECIDED That the days of the big purple banknote are numbered. Apparently, it is far too convenient for criminals and terrorist groups, € 1 million with a bundle of notes coming in at About 2kg (4.4lbs). There’s a reason it Became Known in some circles as a “Bin Laden”.

Of course, the € 500 note is an absurdly large denomination. Introduced It was only at the insistence of the Germans, Who are notoriously fond of cash and suspicious of debt. The Irish Central Bank, on the other hand, never bothered to issue them.

Just as rumors of the € 500 note’s demise Were emanating from Frankfurt, former US treasury secretary Larry Summers was taking to the Washington Post to argue That the $ 100 bill Past Should be abolished. Citing a recent Harvard study, Summers Said That a global “moratorium on printing new high-denomination notes would make the world a better place”.

But much like, say, the surveillance debate claims That we must stop “X” Because terrorists use “X” can blur some of the larger Implications of the discussion, Particularly in terms of The Importance of cash to freedom and privacy.

In a world of negative interest rates and low inflation (or even deflation), holding large quantities of cash is not that radical or irresponsible. But it can lead to a concerted effort from the central banks to dissuade people from using cash as a hoarding mechanism. Just last month, Norway’s biggest bank called for the end of cash in the country, again citing concern over criminal activity.

A war on cash Might be cast as a byproduct of the war on terrorism or the war on drugs, but we think deeply about prep Should the power That would accrue to banks and Governments in a cashless society.