[Dave Birch] Thanks to everyone who e-mailed with links to the story about how the British have “banned” the 500 euro note. The note — generally referred to as the Osama, because everyone knows they exist but honest citizens have never seen one — is a particular thorn in the side of the forces of law and order.
UK wholesalers agreed to stop selling the distinctive pink and purple note last month after SOCA investigators found nine out of ten were used for illegal activities. The move is likely to heap pressure on the European Central Bank to withdraw the note from circulation entirely. It remains legal tender in the UK and there are fears British criminals will now simply source their 500 euro notes on the continent, or turn to the smaller value 200 euro note which is worth £170.
[From Britain axes 500 euro note over organised crime fears | Mail Online]
SOCA is the Serious Organised Crime Agency, the British version of the FBI I suppose. They must be pleased that we have done away with the dreaded Osama, musn’t they? Perhaps this is the action that David Lewis, Head of Anti-Money Laundering in the Financial Crime Unit at Her Majesty’s Treasury, was referring to a few weeks ago when I was whining on about high-value banknotes at a seminar.
But hold on. As the stories make clear, the British haven’t banned the Osama at all. In fact, I’m sure that stopping the wholesale distribution will have absolutely zero impact on the circulation of the notes in the UK, since criminals will just buy them down the pub instead of in banks. But it’s the thought that counts, isn’t it
Interestingly, this move once again puts Britain at odds with it’s neighbours. The European Commission’s draft statement on legal tender (I’d never heard of this before today, so thanks twitterverse for the pointers) contains fullsome support for the Osama.
According to a commission recommendation issued on Monday (22 March), retailers should not be allowed to put up signs banning the use of high-value banknotes. Refusal to accept these bills is fine from time to time if a shopowner is out of change at a given moment, but this should not be a permanent rule, the commission has said.
[From EUobserver / Commission frowns on shop signs that say: '€500 notes not accepted']
Now, some might find the Commission’s support for notes that the British police say have “no credible legitimate use” rather puzzling. After all, the Commission ought to want to support member states in cracking down on tax evasion, money laundering, drug smuggling, people trafficking and avoiding Spanish property taxes (which, as I understand, are the principal uses of the Osamas). And from the e-payments world, the Commission’s astonishing support for the least efficient payment mechanism, cash, is frankly bizarre.
Finding the tiny one- and two-cent coins more trouble than they are worth, Finland and the Netherlands have adopted rules rounding up prices to the nearest five cents, but Brussels says states should refrain from further such rules and stressed the right to use one- and two-cent coins.
[From EUobserver / Commission frowns on shop signs that say: '€500 notes not accepted']
This is all very odd. If the Commission is serious about “Digital Europe” then a more efficient payment system that is based on a level playing field — between cash and e-payments — should be at the heart of it.
These are the personal opinions of Consult Hyperion and its guests and should not be misunderstood as representing the opinion of its clients or suppliers. To discuss how any of the technologies discussed in this post can benefit your business, please contact Consult Hyperion.
