The United Kingdom has signaled that it could scrap its £50 note from circulation, saying it is rarely used for routine purchasing and that it is also ‘perceived by some’ to be used for money laundering and other financial crime.
The future of the £50 note is discussed in the Treasury department’s call for evidence on cash and digital payments in the new economy, published on Tuesday.
The document notes that “the £50 note is believed to be rarely used for routine purchases and is instead held as a store of value, ” and there is a ‘significant’ overseas demand for the note “mainly held as a store of value alongside other currencies such as the dollar and euro.”
It adds that there is also “a perception among some that £50 notes are used for money laundering, hidden economy activity, and tax evasion.”
“From an economic perspective, having large numbers of denominations that are not in demand, saved by the public, or in long term storage at cash processors rather than used in circulation does not contribute to an efficient or cost effective cash cycle,” the Treasury document stated.
It then poses the question: “Are there other international examples of countries managing a decline in demand for cash that the government should look to? Should the UK follow a similar pathway as other countries in modernising the currency?”
The EU’s highest denomination, the 500 euro note, was also regarded as a favoured note for money launderers and other criminals.
In 2016, the European Central Bank stopped reproducing the notes, a move linked to the notes association with financial crime.
In his Spring Statement on Tuesday, Chancellor Philip Hammond mentioned the call for evidence, explaining that the government is encouraging cashless payments but at the same time ensuring that ‘ cash remains available to those who need it most.’
The state will also look into cracking down on the use of cash for money laundering and tax evasion purposes, he explained.
– Irene Madongo