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Kennedy School Suggests Removing Big Bills from Circulation to Cut Crime
The Kennedy School of Government at Harvard University has published a paper that suggests removing large-denomination currency would cut down on crimes that involves trafficking ill-gotten money. [harvard.edu]
Illegal money flows pose a massive challenge to all societies, rich and poor. Tax evasion undercuts the financing of public services and distorts the economy. Financial crime fuels and facilitates criminal activities from drug trafficking and human smuggling to theft and fraud. Corruption corrodes public institutions and warps decision-making. Terrorist finance sustains organisations that spread death and fear. The scale of such illicit money flows is staggering.
Our proposal is to eliminate high denomination, high value currency notes, such as the €500 note, the $100 bill, the CHF1,000 note and the £50 note. Such notes are the preferred payment mechanism of those pursuing illicit activities, given the anonymity and lack of transaction record they offer, and the relative ease with which they can be transported and moved. By eliminating high denomination, high value notes we would make life harder for those pursuing tax evasion, financial crime, terrorist finance and corruption. Without being able to use high denomination notes, those engaged in illicit activities – the “bad guys” of our title – would face higher costs and greater risks of detection. Eliminating high denomination notes would disrupt their “business models”.
Former Harvard President and ex-Treasury Secretary concurs, saying "a moratorium on printing new high denomination notes would make the world a better place." [aol.com]
Scandinavians rely on cash for less than 6% of all payments made. By contrast, around 47% of U.S. payments are still made with cash, according to the Norwegian central bank.
Will taking the $100 bill out of circulation make a significant impact on criminal activity?
