Let’s get rid of $100 bills — they are for crooks only
You pay for a cup of coffee with your smartphone. McDonald’s will let you pay for a cup of tea with a credit card. Increasingly, people pay their bills online.
So, who needs the $100 bill?
When I tried to pay a taxi in Frankfurt with a €500 bill, the driver refused to take it, but let me pay in U.S. dollars.
So, who needs the €500 bill? Or, for that matter, the €200 bill?
Crooks — that’s who uses these bills. After all, even crooks have to pay each other. Yes, the mega-level crooks deal in numbered accounts in exotic places, but more mundane criminals have to pay each other without being detected. And paper money works well in these situations.
The point is that these high-value bills are lightweight and difficult to counterfeit. Which makes it easy to store illegal funds and for crooks to pay each other. After all, the seller in an illegal transaction wants to be paid in legal funds!
The majority of $100 bills are now circulating outside the U.S. because they are not of much use here. In effect, the U.S. is making it easy for crooks outside the U.S. to conduct their business.
In 2010, Britain stopped the circulation of €500 bills because its Serious Organized Crime Agency concluded that the overwhelming majority of these bills were being used crooks. Now the European Central Bank has declared that it too is interested in banning the €500 bill.
The U.S. stopped using $500 bills in 1969. It’s time to get rid of the $100 and €500 bills. No doubt, crooks will find some other way to conduct business. But, it’s not sound public policy to make it easy for crooks to pay each other in difficult-to-counterfeit, high-value lightweight bills.
Update on May 4, 2016
Today the European Central Bank announced that it will phase out the €500 note by the end of 2018.
Europe to Remove 500-Euro Bill, the ‘Bin Laden’ Bank Note Criminals Love
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