World Economy

ECB Getting Rid of €500 Banknotes

ECB Getting Rid of €500 BanknotesECB Getting Rid of €500 Banknotes

The European Central Bank will stop issuing €500 ($575) banknotes towards the end of 2018 on concerns it could facilitate illicit activities but outstanding bills will remain in use indefinitely, the ECB said in a statement on Wednesday.

“The €500 note will remain legal tender and can therefore continue to be used as a means of payment and store of value,” the bank said, CNBC reported.

“The €500 banknote, like the other denominations of euro banknotes, will always retain its value and can be exchanged at the national central banks of the Eurosystem for an unlimited period of time.”

The ECB has been looking to get rid of the €500 note, despite the objections of Germany’s central bank, due to concerns that it is also used by criminals and militants to finance their activities.

The move may also signify a greater push into a cashless economy, in which credit cards, digital payments and perhaps, one day, even bitcoin dominate, Fortune reported.

“Eliminating the bank note could help temper criminal activity, but in reality the implications are much broader,” analysts from Stratfor, an American publisher and global intelligence company founded in 1996 in Austin, Texas, wrote in a February research note.

“The idea is just the most recent step in an ongoing process moving Europe, and indeed the world, closer to an entirely cashless economy.”

After all, who digitally transferred money where it can be easily tracked—cash on the other hand, generally does not come with GPS. That would allow governments to make policies such as negative interest rates and capital controls potentially more effective.