A government proposal that would see the Swiss CHF1,000 note – currently the most valuable banknote in the world – become valid for life has provoked the ire of transparency advocates and the political left.
Swiss bank notes, including the CHF1,000 note, have a limited lifespan of 20 years once they have been pulled from circulation by the Swiss National Bank which issues new notes every 15 to 20 years.
Finance Minister Ueli Maurer’s proposal to drop the limited validity for old banknotes would bring Switzerland in line with most industrialised countries which allow banknotes to be exchanged regardless of age.
The government proposal to amend the law on monetary units and means of payments was presented in August. All banknotes issued between 1976 and 1979 – including the famous CHF1,000 note adorned with ants and all series that followed – would be relieved of the 20-year time limit on their exchange.
During the consultation phase, which ended last week, the proposal was welcomed by Switzerland’s leading centre-right parties – the People’s Party and the Radicals – who believe the time limit for exchange on bank notes is untenable.
‘Currency of choice’ for criminals
The left, however, rejects the proposal outright.
The Social Democratic Party argues that the attractiveness of the CHF1,000 note will be further reinforced to the benefit not only those who save, but any person engaged in illegal activities such as money laundering, tax evasion or the financing of terrorism.
Such fears pushed Singapore to cease production of its $10,000 banknote in 2014, which was at the time the most valuable banknote in the world. The European Central Bank has also announced it will stop issuing €500 notes – considered by European courts to be the “currency of choice” for criminals - from the end of next year.
For the Swiss branch of leading anti-corruption organisation Transparency Internationaexternal linkl, the absence of foreign alternatives coupled with the end of time limits on the validity of the Swiss notes is cause for concern.
“In our view, [ending the time limit on validity of banknotes] further encourages illegal activities such as corruption and tax evasion, but also the holding of illegal funds and organised crime,” the organisation wrote in a statement.
Notes that disappear
Transparency International highlights the massive popularity of the CHF1,000 note to argue that it would be preferable to cease issuing the banknote all together; of the CHF72 billion in cash put into circulation in 2016, 62% was in the form of CHF1,000 notes.
Evidently, the famous violet note is not only popular in Switzerland.
“Using cash has the advantage of leaving no trace. So people or organisations abroad can also use these Swiss banknotes to hide money from tax authorities or criminal prosecution authorities,” Transparency International argues.
It is far from certain that these arguments will be heeded by the government in which the People’s Party and Radicals hold a slim majority, and which is soon expected to confirm this additional boost to the sometimes shady notoriety of the Swiss CHF1,000 note.
Translated from French by Sophie Douez, swissinfo.ch