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
The highest bill in my country is the equivalent of cca 215 USD. Almost no one uses them, you don’t get one from the ATM at all. The second highest is equivalent to cca 86 USD and even that you don’t see that often. You get these from the ATMs but since most of the transactions are not in cash, you don’t usually have these bills on hand anyway. Obviously it depends who you are and what business you’re doing, but we just don’t have the need to carry around so much cash.
We used to have a $1,000 bill in Canada … they discontinued them due to organized crime, but there are still a lot still left in circulation, probably stashed away in safes and safety deposit boxes.
Canada used to have $1000 bills, but these were [discontinued in 2000](https://www.bankofcanada.ca/2000/05/bank-canada-stop-issuing-1000-note) as part of the fight against money laundering and organized crime.
As of January 1, 2021 the $1000 bill (among others) [stopped being legal tender](https://www.bankofcanada.ca/banknotes/about-legal-tender/), meaning you can no longer spend them as cash, but The Bank of Canada will continue to honour them at face value.
For every day transactions very little will change. Most shops won’t accept the larger bills because keeping change for it is a nightmare and the risk of accepting a counterfeit version becomes proportionally greater. So if they had larger bills basically a few jokers will get them, and an overwhelming majority will never see or use one.
For tax dodgers, money launderers and people funding illegal activities however, their storage issues for large amounts of capital becomes much more manageable. The logistics of hoarding large amounts of cash wealth becomes quite complicated once your criminal activities scale up – I think there was some trivia that Pablo Escobar was spending $2500 on elastic bands every month. The higher the denominations available, the more manageable this becomes.
This gives a good summary about the money laundering and illegal activity funding benefits of larger denominations:
http://news.bbc.co.uk/2/hi/8678979.stm
Latest Answers