(Finance) – The European Central Bank (ECB)”did not carry out a specific evaluation” of theimpact on financial crime the decision to stop the production and emission of 500 euro banknotes. However, “the interruption of the issue of the 500 euro banknote has led to a substantial and widespread reduction in its use, to all intents and purposes”. This can be read in a letter that the president Christine Lagarde sent MEPs Gunnar Beck and Nicolaus Fest, in response to their question.
Lagarde recalled that the Governing Council decided, in May 2016to permanently stop production of the €500 banknote, taking into account concerns that this denomination could facilitate illegal activities. From April 2019 the national central banks of the Eurosystem no longer issue €500 banknotes. To maintain confidence in the euro banknotes, the Governing Council has decided that the €500 banknote will remain legal tender and can continue to be used.
“Although the €500 banknotes can be used as a store of value inside and outside the euro area, both in normal times and in times of heightened uncertainty and financial or political turmoil, the ECB fully recognizes the need to take measures to combat financial crimetherefore the decision,” he stressed.