The European Central Bank is set to decide on Wednesday the fate of the 500-euro banknote, which many people associate with money laundering, the black market and terrorist financing.
But its possible abolition is raising hackles in countries such as Germany.
The violet-coloured bill, the largest denomination banknote in the single currency area and physically also the bigger than the five other euro bills, is on the agenda of a meeting of the ECB’s governing council, a bank spokesman told AFP. Notwithstanding any surprises, the council is likely to vote to stop issuing them, as the bill is believed to be favoured by criminals for moving large sums of money around without the authorities knowing.
“Such notes are the preferred payment mechanism of those pursuing illicit activities, given the anonymity and lack of transaction record they offer, and the relative ease with which they can be transported and moved,” according to a recent Harvard University study. Because of its size and portability, the 500-euro note has become so prized in underground finance that it can trade at more than its face value, and has become known in some circles as a “Bin Laden”, the study said.
The 500-euro note is “used more for hiding things than buying them,” said French Finance Minister Michel Sapin in March. “It is used more to facilitate transactions which are not honest than to allow you and me to buy food to eat,” Sapin said.