The governing council of the European Central Bank wants to abolish €500 bills, Handelsblatt has learned.
The ECB’s top decision-making body recently adopted a declaration of intent on this topic, insiders told Handelsblatt, which is a strong indicator of how the central bank is likely to decide in several months’ time.
Mario Draghi, the ECB’s president, later Monday afternoon confirmed that the central bank was “considering action on that front” in testimony before the European Parliament.
The council has already asked its committee on banknotes to look into the technicalities of withdrawing the bills from circulation, according to a source familier with the matter. The committee now has two to three months to complete this process before the central bank reaches a final decision. Key questions include how long the bill will continue to be accepted once circulation is halted.
For the ECB, ending circulation of the bill is a means to fight money laundering. The bill is used primarily for illegal business, according to corruption and crime experts.
The ECB’s plans are opposed by the Bundesbank in Germany – where cash remains a much more popular form of payment – along with the Austrian and Luxembourg central banks, according to the source. But a simple majority in the council would be sufficient to stop issuing the €500 notes.
The European Central Bank would not comment when contacted by Handelsblatt, noting that the ECB’s chief Mario Draghi was to speak later Monday before the European Parliament’s monetary policy committee.