Earlier this month, the European Central Bank announced that it will stop issuing 500 euro notes. Known colloquially as the ‘Bin Laden’, because it helps criminals move large sums without detection, the 500 euro will not be produced from 2018 when the new Europa series of notes are launched to replace current euro notes.
Since this announcement, some have wondered if the 1,000 franc Swiss note, worth substantially more, could be next on the currency hit list.
According to the Federal Council, Switzerland’s cabinet, the widespread use of the 1,000 franc note is an integral part of the country’s culture and the risks of criminal misuse are limited.
One Swiss national councillor, Margret Kiener Nellen (PS/BE), voiced concern about the proliferation of 1,000 franc notes in Switzerland. The number of these notes in circulation has exploded from CHF 20 million to CHF 40 million over the period from 2000 to 2014. She fears these large notes are being used to finance terrorism, launder money and evade tax.
In a response published last week, the Swiss government said it is aware of the risks but considers measures have been taken to limit abuse. Since January, professionals who sell goods and services in exchange for cash over CHF 100,000 must fulfill due diligence obligations.
And while the number of 1,000 franc notes in circulation has increased, so have the numbers of other denominations. According to the Federal Council the overall increase could be driven by a loss of confidence in banks after the financial crisis, and people using cash as a way to avoid negative interest since the Swiss central bank introduced negative rates on certain deposits in December 2014. The Federal Council also pointed out that the Swiss franc is not as well recognised internationally as the euro.
Switzerland’s central bank has not voiced any plans to phase out the 1,000 franc note.