- The War On Paper Currency Begins: ECB Votes To “Scrap” 500 Euro Bill
by Tyler Durden, www.zerohedge.com
Update: in case there was any doubt about the ECB’s true intentions, we just got the official “denial”:
DRAGHI: ANY ECB ACTION ON EU500 NOTE IS NOT ABOUT REDUCING CASH
Translation: the ECB action is only about reducing physical cash, some 30% of it to be specific.
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The first shot in the global war on cash was just fired, by none other than the ECB, which moments ago Handelsblatt reported… (top of post)
… and Bloomberg confirmed – ECB COUNCIL VOTES TO SCRAP EU500 NOTE: HANDELSBLATT – has voted to scrap the second highest denominated European bank note in circulation:
So what, big deal, eliminate it. The people will still have 5, 10, 20, 50, 100 and 200 euro bills right. As we wrote just one week ago, the answer is not that simple at all. Recall that the €500 note is the second highest currency denomination in G10, after the CHF1,000 note. More importantly, the total value of €500 notes in circulation amounts to €306.8bn and has been rising as shown in this BofA chart: (below)
Furthermore, as a share of the value of total euros in circulation, the €500 note is the second-highest, after the €50 note. (chart below)
This is what we said last Thursday:
In other words, if overnight the €307 billion worth of €500 bills were eliminated, the notional value of the entire amount of European physical currency in circulation would decline by 30% to €700 billion!