500 Euro banknotes are 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. According to the ECB, the Bin Laden bills are increasingly being used for illegal purposes. This was the main reason for the discontinuation. Since April 2019, 500 euro banknotes are no longer distributed.
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
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.