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CHF1,000 notes account for half of all Swiss cash

cash
Land of cash: the CHF1,000 banknote is one of the world’s highest-denomination bills. © Keystone / Gaetan Bally

More than half of all Swiss cash in circulation, almost CHF50 billion ($56 billion), is held in CHF1,000 notes, though a significant part of those notes might be in other countries, according to Swiss National Bank (SNB) Vice President Martin Schlegel.

“We assume that a good portion is also circulating abroad and is used to store value,” Schlegel told Die Volkswirtschaft magazine. “This is a compliment and a vote of confidence in Switzerland and the SNB: people trust that our money will keep its value.”

The CHF1,000 banknote is one of the world’s highest-denomination bills. In the neighbouring euro area, the perception that high-value paper money aids criminal activity led the European Central Bank to stop issuing its own €500 bill in 2019. The SNB has said that it has no plans to discontinue its largest note.

+ Read more: the CHF1,000 note – cash for crooks?

The overall value of Swiss bills has “strongly increased” to more than CHF90 billion half a year ago, Schlegel added. This means that cash use rebounded from a slump after Switzerland’s central bank lifted interest rates back into positive territory last September. In October, the total stood at CHF81 billion, Schlegel said previously.

Schlegel voiced confidence that consumers will continue to use cash even as digital payment methods become more popular. He is critical of measures for making bills and coins more attractive, like forcing shops to accept cash or subsidising ATM installations. 

+ From our archives: CHF1,000 note is a hidden treasure

Still, while cash use increased when SNB’s benchmark was below zero, the rate of -0.75% didn’t trigger large-scale withdrawals of deposits, he told the academic magazine published by the economy ministry.

“We could have lowered interest rates even further,” Schlegel said.

Cash initiative

On Wednesday the government announced a so-called counter-proposal to a people’s initiative, lodged in February, aiming to constitutionally safeguard the use of cash in Switzerland. Campaigners behind the libertarian initiative are worried that increasing digitalisation could lead to the end of cash, which they say would diminish citizens’ freedom. The government’s counter-proposal, while more moderate, would also enshrine cash in the constitution. It will now head to parliament for debate.

+ The cash initiative: what’s at stake?

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