500 Euro banknotes are taken out of circulation. Here’s why

The European Central Bank will no longer issue 500 euro banknotes, starting from 2018. The highest denomination bills of the single currency will gradually be taken out of circulation. Here’s why:

They are nicknamed 'Bin Laden'

The average European has never held a 500 euro banknote in his/her hands. The purple colored 500 euro notes are nicknamed ‘Bin Laden’, because everyone knows them, but (almost) no one ever saw them.

Only about 3% of circulating euro banknotes are 500 euro notes. In comparison, the 50 euro notes make up 45% of all circulating euro banknotes.

They are associated with crime and money laundering

The banknote of €500 is the third most valuable banknote in the world today, after the 1,000 Swiss francs note and the 1000 Singapore dollars note. The high value of the €500 note makes them very suitable to finance illegal activities. An attache case filled with 500 euro notes can hold about €6,000,000 euro.

In 2010, the Serious Crime Agency declared that 90% of 500 euro notes in the UK were in hands of organised crime groups. Bureaux de change in the UK were ordered not to buy or sell 500 euro notes.

25% of all 500 euro banknotes are situated in Spain. In contrast, the size of the Spanish economy is only 11% of the Eurozone GDP.

They are not accepted for day-to-day payments

You won’t be able to pay with a 500 euro banknote in many shops in Europe. In most Eurozone countries, shopkeepers will by default refuse €200 and €500 euro banknotes.

Shopkeepers are allowed to turn away customers paying with 200 and 500 euro notes when the purchase amount is lower than half of the banknote’s value.