This is the end for €500 notes!

The Central European Bank (BCE) will gradually phase out the notes – the highest euro denomination – because of their extensive use in money-laundering, fraud and forgery. The notes will remain legal tender for a while yet and can be exchanged in any bank in any member state.

The note is one of the highest denomination notes in the world – only the 1,000CHF (Swiss Franc), and the 10,000 Singaporean dollar are rated higher. During the time of the property boom in Spain, the €500 note was circulating at a time when so-called ‘black money’, or paying part of a home purchase in undeclared cash to reduce tax and fees was not only tolerated but even commonplace. This practise has declined since successive governments in Spain tightened up on ‘black money’ transactions and even tracing back on new homeowners and taxing them for the difference.

And although this seems a dramatic action by the Spanish Government, any tax debt not notified to the payee within four years expires under Spanish statute of limitations and the amount avoided has to be at least €120,000 to be considered as a criminal offence. Since the market crash, many new owners have now realised that ‘black money’ can come back and bite the cash-dealer, meaning in recent years, dealing in cash has all but died out.

In the UK in 2010, the banks and currency exchange bureaux stopped accepting them as it was discovered that 90% of those they took had been linked to illegal operations. And during the highly publicised numerous corruption cases recently uncovered in Spain, most of the cash that was recovered was in €500 denominations.

The press dubiously nicknamed the €500 banknote as the ‘Bin-Laden’ – never seen, but everyone in Spain knew they were out there and being used in something criminal or illegal. In today’s Europe, various authorities have been considering the withdrawal of the €500 note for some time in a bid to fight illegal cash movements, corruption, tax evasion and more relevant in today’s world – the financing of terrorism.

These €500 notes are rarely used by ordinary European residents, since it is practically impossible to get change for them on purchases, and the fear of losing or dropping them is a more practical reason the BCE wants to cease minting them. In fact, nearly 56% of European citizens say they have never even seen a €500 since it was introduced as the European currency. According to Eurostat, the continued upsurge in online banking – 16% in 2007 to 39% in 2015 and the greater use of credit and debit cards – the volume of notes minted are decreasing year on year.

According to WorldPlay, the ‘contact pay’ technical provider, digital payments could reach ‘full maturity’ this year and will outstrip credit card payments by 2019. A BCE report shows that Spain, along with Austria and Italy – are slower to catch up with this technology as residents are more likely to pay in cash, and for higher amounts. Fewer bars, shops and other trade premises accept cards in these countries than elsewhere in the EU, or only over a certain amount, given the high commission charges made by banks for each payment. Each EU member state prints its own euros at its national bank and tax authorities in Spain have been considering stopping minting €200 notes for the same reasons given over the €500 note.


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