Why hasn’t the government released bills bigger than $100, considering the various products nowadays that go above $1000? What kind of changes will we see and what kind of impact would it have?
Edit: By government, I mean US Government. thanks for pointing the ambiguity out!
In: Economics
There would be basically no economic consequences. Cash is basically never used anymore, especially for large transactions. Its all digital or cashiers checks.
So there just isnt really a point to make a bigger bill at all
The US used to issue larger denominations, like $1000 bills. They are still considered legal tender as well.
I assume that by government you mean the US government. Because other governments HAVE released bills bigger than 100 units of the currency.
Fun fact the US used to have a $1000 bill, that was used for large bank transactions before electric transfers.
There is nothing stopping them from doing this, and if they feel that people would benefit from them, they likely would.
The Eurozone ~~issues~~ issued the €500 note (US$546).
Switzerland has the CHF 1000 note (US$1093).
They are popular for illegal payments and money laundering.
They have. There’s the $500, $1000, and IIRC the $10k. These are still in circulation even though they don’t issue them anymore. They stopped issuing them because the demand was low. Hardly anyone pays that much in cash for anything. If you need to buy something with a briefcase full of money, what you’re doing may not be legal.
The reason why the US stopped issuing $1000+ bills or bankers notes is because 1: finance has largely gone digital, and 2: the people needing large amounts of physical money are criminals.
My grandparents had $1000 bills they gave each other as a novelty for Christmas. That’s the only reason most Americans would use them.
Nowadays, if an American is traveling with a few thousand dollars in cash, and pulled over by the police, the police will just steal the money and add it to their budget thanks to anti-drug dealer laws called civil asset forfeiture (lookup relevant Last Week Tonight video online). It’s basically become illegal for Americans to possess large amounts of American currency
No consequences since most banking is electronic transfers nowadays. Cash larger than $100 denomination is no longer issued by the us treasury. Highest value notes are held by collectors, investors and are still legal to own.
Most people who are using large bills today are doing so in order to hide their transactions. Either from police investigators or from the tax office. So while a $500 bill would benefit a number of people doing legitimate business it would benefit criminals more. There was actually a 500 euro note and it caused international criminal network to ditch the dollar for the euro. Some people speculated that the US should regain its position by also issuing a $500 note but instead the European central bank stopped issuing this note in order to combat crimes.
Nothing.
The reason why there is no 500$ bill is because theres no additional benefit for anyone.
Imagine you going to the bank and getting 500$ for your vaccation. Do you take out 5 x 100$ bills, or do you take a singular 500$ bill?
with a single 500$ bill, upon the first purchase, the cashier now has to give you 4X 100$ bill and + change, if they don’t carry 100$ bill, thats a whole lotta bills you now have to carry.
But if you had take 5x 100$ bill, the cashier only has to find change for a single 100$ bill.
What benefit does providing people with 500$ or even 1000$ do? make drug deals for cartels better? or allow purchasing of cars with cash to avoid taxes?
For average people, there is no reason to actually use a 500$ bill, because commodities don’t cost that much.
If basic things like food and milk start costing in the hundreds, yeah, we’ll start seeing 500$ and 1000$ like the Japanese Yen.
The US Treasury stopped printing $500 and $1000 banknotes in 1945. The Treasury ceased circulation of them in 1969, meaning any that they received from banks were destroyed. The reason given was lack of interest. Back then, a check was easier than a wad of cash. Today almost anything is generally easier to pay for by electronic transfer, whether by card or device.
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