Singapore recently announced they were taking the $1,000 Singapore dollar out of circulation. This decision continues a trend by banks to eliminate large denomination banknotes. Why are the banks doing this?
Source: Banknote World Educational
Ultra large denomination banknotes were common before the development of computer based bank ledgers and a trustworthy banking system. Many people have probably heard about $1 million or larger banknotes. Banks would have a few of these and trade them back and forth among banks as IOUs. But there were also large denominations used in circulation, at least by some. The $1,000 USD, the $10,000 Singapore dollar are examples of these large semi circulating banknotes. More recently, the 500 Euro was discontinued. There is even pressure to eliminate the USD$100 and the GBP50.
Source: Banknote World
The 2 reasons to eliminate large denominations that are always given are:
- Large banknotes are used for illicit activities such as drug dealing and smuggling
- High denomination banknotes make it easier for money to flee a country when there is economic or political instability.
Large Denomination Banknotes Replaced by Tech
This seems to make little sense. For example, Bitcoin is valued at over $10,000 is hard to trace and easy to move. Precious metals and gems have high stored value and can be moved easily and certainly there is a liquid market for precious metals in every country. Bitcoin is not so easy to spend but do you think the briefcases full of 500 Euro notes used by criminals are used to buy groceries?
Precious metals are heavy and can be found by border control. Let’s see. A typical carry on bag can fit about 20,000 banknotes and weigh about 20Kg. If the notes were $100, that would be $2 million and I can tell you from personal experience, the x-ray machines will see all that paper as a dark, dense mass. $2 million of gold coins is about 1,000 ounces or about 30 kilograms. In terms of size, this would out to be about a 10 feet stack of coins.
Source: Pixabay
So which are the largest value banknotes left in the world not including the large US Federal Reserve notes from the 1930s which are still valid:
- Brunei 10,000 dollars = $7,600 USD
- Swiss 1000CHF = $1100 USD
- FIJI $2000FJD = $940 USD (this was a commemorative note but is still valid in circulation)
- UAE 1000 Dirham = $272 USD
- Swiss 200CHF = $220 USD
- Armenia – 100,000 Dram = $202 USD
- Oman 50 rials = $130 USD
- Hong Kong $1000 = $125 USD
Anyone have any others that have a higher value than the USD $100?
