The Deutsche Bundesbank, the central bank of Germany, may be considering a gradual phasing out of its €500 banknote.
An unnamed source told The Wall Street Journal the European bank could stop printing new versions of the €500 bill, a move that “could be seen as reasonable by everybody on the governing council,” including Bundesbank President Jens Weidmann, who also sits on the policy setting body. If it’s true, the move could signal the bank’s changing attitude towards an idea that has sparked widespread debate in Germany.
Bundesbank open to phaseout of €500 bank note https://t.co/IGRMw2knG1
— Wall Street Journal (@WSJ) April 12, 2016
Similar to Canada’s $1000 bill, which was withdrawn in May 2000 to fight against counterfeiting, money laundering and organized crime, the Bundesbank’s €500 banknote is increasingly used an instrument for illegal activities.
Mario Draghi, president of the Central European Bank (ECB), said “it’s in this context that we are considering action on that front.”
Despite concerns, the move to eliminate the largest denomination of all ECB banknotes has been met with controversy in Germany, where paying with cash remains commonplace.
“The elimination of the 500-euro note is becoming ever more likely and constitutes the start of the elimination of cash,” said Max Otte in February, after Weidmann commented the debate “must be kept clearly separate from this monetary policy-motivated discussion on the abolition of cash.”
In February, Weidmann added: “It is in my view doubtful whether terrorists or criminals can really be stopped because large notes are eliminated.”
A decision from the governing council is expected at its meeting this May 4.