Folks who do not trust banks/governments may want to do cash transactions. Even if it seems highly unusual to pay for a car/vacation/house in cash this is not a reason to outlaw it.
Second, with inflation, what seems to be a high sum today may not seem so 15 years down the road.
Third, many suspect that after outlawing largest bills we will go to prohibiting largest remaining, etc.
> Even if it seems highly unusual to pay for a car/vacation/house in cash this is not a reason to outlaw it.
It's already outlawed in most EU countries. In Italy the maximum cash payment is 3000 euro. In France, 1000 euro. Especially real estate is great for laundering money if cash payment is allowed.
> Second, with inflation, what seems to be a high sum today may not seem so 15 years down the road.
the french example is a bit beyond ridiculous - all the people I know that had to do home reconstruction recently myself included, or some bigger shopping (ie car), ended up fed quite a few times when their basic credit cards were blocked for rest of the month (visa classic has 10k/month limit) and you cannot then proceed and pay rest of the expenses in cash (withdrawn ahead).
I am all for curbing criminal activities (somehow suspecting big ones are few steps ahead anyway), but these things have consequences for rest of the folks too.
Considering how cheques are usually welcomed in France, I strongly disagree with you. And, if a normal cheque isn't accepted, you can step into your bank and ask a bank-cheque, which is the top. Sure, you have to go to the bank, but it's just for big payments, so not that often.
What does that regulation stop other then people not using bank accounts?
How could this possibly stop any real crime?
Is there example usages of this law?
I've bought computer hardware here that totaled more then 1k when k was setting up a few services. How would that even work since it was online in France?
> What does that regulation stop other then people not using bank accounts?
In France, if you don't have a bank account, you don't exist :-) Seriously, everybody just assumes you have a bank account. Otherwise, it looks fishy.
> How could this possibly stop any real crime?
Directly: hold-up is pointless with no cash. Cheques are useless and credit cards can be easily blocked.
Indirectly: the whole point of banning cash is to prevent untraceable financial transactions from being performed. This is supposed to be annoying for criminal activities.
> How would that even work since it was online in France?
I'm not sure I got your question. Please keep in mind that the threshold is on _cash_ transactions, not on every transaction. As far as it is traceable, no amount is forbidden.
People may grow unfavorable feelings if the government because if regulations like these. Considering these feelings is still important for a government of it still cares in some way about its people.
One reason would be to store your savings yourself instead of entrusting them to a bank. Why would you not entrust them to a bank? Because of negative interest rates, capital controls (e.g. Greece) and concerns due to bank liquidity and bail-ins.
That said, the €500 note thing is a bit of a red herring (I've never seen one in my life BTW). This is just the thin end of the wedge. The greater goal is to make cash as unattractive as possible to nudge (or force) people to use surveilled electronic cash, so as to better enforce negative interest rates, bail-ins and redenomination.
Still a 300 000 000 000 € thin end. There are nearly two 500€ notes printed for each euro-area citizen [1]. That seems a lot to me. I have never seen one too.
It makes it easier to keep your money in a personal safe if you would rather not trust banks with it. It is not illegal or immoral to avoid using banks. It is your right as a free citizen. Governments don't like it because they want to have control over your savings.
Is this paranoia? I don't know, ask the people in Cyprus, Greece and Portugal.
Because you are afraid that you will either lose a significant amount of your life's savings (Cyprus) or you will no longer have unrestricted access to your account (Greece).
Jokes aside cash is (IMO) very important. If you have cash in your pocket you are not vulnerable to.. how to say this.. "being fucked over" by your government or, as is the case lately, someone else's government or corporation (my mother had this happen with her paycheck). This obviously ensures the basic freedom that is more and more threatened in the modern "civilized" world.
And, again, it feels good to have cash with you. That cash represents your hard work and that hard work is quantifiable by the quantity (and color) of bills.
On a more personal note, i'd like to get paid in cash 'cuz banks are the biggest pieces of.. they are bad people doing (mostly) bad things legally.
edit:
Here's a story;
We had a debt with a company. That debt we settled quid pro quo as that company did some damage to our apartment. After a while that company got bought by another company and soon after we got a letter that said that we owe them money (with interest calculated in, ofc). That fell on my mother as her name was on the contract. She, being the "don't make trouble" kind of person, didn't want to sue them (and we didn't have much money to pay lawyers at the time), although she would probably win. The way those kinds of debts are payed in my country is by them sitting on your paycheck (you can pay them in cash, ofc). That goes through the government financial agency. Thing is that the amount payed shouldn't go over 2/3 of the pay you get, for obvious reasons. But said agency took her whole pay.
In other words: To whoever downvoted without explaining why s/he downvoted, you are probably a financially safe person that knows what to do (or your lawyer knows what to do) when stuff like this happens. Or in yet other words: go f yourself.
Did you have the agreement regarding the settlement of the debt in writing? If so you should have taken that to court (or indeed, just presented it to them), if not then that was your problem.
Indeed, exactly the same thing could have happened if you'd paid the debt in cash with no record of the transaction, whereas a recorded bank transfer would be hard for them to conveniently forget about.
It has high value in small volume - this is the point. It allows you to keep significant sums of money outside of a bank with relative ease. The abolition of high-value notes makes this significantly harder both for the 'good' guys and for the 'bad' guys.
Yeah 500€ notes are pretty useless. Most shops here in Finland don't accept 200€ or 500€ notes at all.
Basically any time I've had to use 200€ or 500€ notes they have basically gone quite directly from bank -> my wallet/envelope -> give some guy (buying an used car for example). The same operation could have been done easily with 50€ or 100€ notes. 500€ notes just makes it easier use/harder to spot usage of large amounts of cash. If you are doing it legally you aren't loosing anything by using 20, 50 or 100€ notes.
FWIW: I used to pay my rent in cash to my roommate. (€1,000) and the ATMs happily handed out €500 notes in Finland.
But I also like to keep an "emergency fund" of high denomination currency in a spare hidden wallet, in that wallet I have 10x£50, 1x€500 and 10x500SEK.
My wallet would be easier to carry if I had just one of each note type instead of 10.
I don't think that anywhere requires particular denominations to be accepted by law. If you're referring to "legal tender" laws, or similar, that's to do with settlement of debts.
Several countries in Europe undoubtedly require businesses to accept all denominations of euros with the qualification of denying change (for obvious reasons, try paying 10EUR with a 500EUR bill).
Some places limit the number of coins you can use (there were people paying fines with hundreds of coins).
Stuffing as much in as possible does make sense. In to ATMs. Central banks have crazy trouble bringing new notes into circulation, and it costs as much to fill an ATM with 1000 €5 notes as it does to fill it with as many €20 notes.
Why should a bank fill in ATM with 5s when it can fill it with 20s? Incentives, for sure. IIRC 5s had an average life of 3 months in circulation, though the linked article suggests is is now 6 months. Larger value notes have a longer life (because smaller notes exist).
Banks have a lot of incentive to push higher value notes into ATMs, while central banks have a big desire no not let this happen all of the time.
If you're a larger business and have a good relationship with your bank, you're likely able to gain a discount on fees or the price of cash for your effort to get smaller value money into circulation. For example, if you operate machines that give paper cash in change (depending on country and regulatory environment).
I've seen reports putting the number of adults without a bank account/credit card/etc. in the UK at 1.5 million. Probably it's similar or even higher in the EU as well.
So these people pay everything in cash. While removing the €500 note might not impact them much, I think the €200 and lower notes are very convenient for them.
There is nothing inherently wrong with a briefcase, but I think the ideal use of large internationally recognized notes is to sew your life savings into your clothes before you sneak across the border to try to start a securer life.
The alternative to flight is fight.. The more you deprive someone of options in one direction the more often they take options in the other direction. But what kind of cold, sick people would like small arms skirmishes so much that they would fund bias towards them in international policy over decades under the guises like a pathological fear of chemicals?
This is the "if you have nothing to hide" argument against (one type of) large-scale surveillance of citizens through metadata collection.
If you're OK with the government keeping track of all but the most trivial financial transaction to protect against tax fraud and organised crime, why would you not be OK with them keeping track of your phone calls and where your car is (ANPR)?
We have had CHF 1000.00 (~1000 USD) notes for a long time (since 1907) and it was never an issue until now. It is convenient if you make a larger purchase to not have to carry around a giant bag.
