The CHF1,000 bill – the most valuable banknote in the world worth about $1,000 – is an integral part of Swiss culture and will continue in circulation, the government has announced. The European Central Bank, meanwhile, plans to stop printing the 500-euro note towards the end of 2018.
Between 2000 and 2014, the number of CHF1,000 bills in circulation rocketed from 20 million to 40 million.
According to left-wing Social Democrat parliamentarian Margret Kiener Nellen, the proliferation of such a high-value note can make it easier for terrorists and thieves to carry cash or to launder money.
In a written reply published on Thursday, the cabinet said it was aware of the risks but felt it had taken the necessary steps to limit abuses.
Both withdrawals and deposits in Switzerland require the existence of a bank account, it declared. Since January, individuals who trade in goods worth over CHF100,000 using cash must comply with special due diligence regulations.
The cabinet argued that the Money Laundering Reporting Office (MROS) had also not received any information on the illegal use of high-value banknotes.
It said the increase in the use of the CHF1,000 note was part of a wider trend in Switzerland towards cash payments and suspicion of the banking system as a result of the financial crisis. The same happened when the value of the franc soared last year, it added.
“The use of cash is an integral part of Swiss culture,” the government declared.
Cash, as opposed to card or mobile transactions, is still widely used in Switzerland, especially for settling monthly bills at the post office or paying for internet purchases. The use of credit cards is a recent development.
The European Central Bank (ECB) said on May 4 it would stop issuing 500-euro banknotes towards the end of 2018 on concerns it could facilitate illicit activities but outstanding bills will remain in use indefinitely.
"The 500 euro note will remain legal tender and can therefore continue to be used as a means of payment and store of value," the bank said.
"The 500 euro banknote, like the other denominations of euro banknotes, will always retain its value and can be exchanged at the national central banks of the Eurosystem for an unlimited period of time."
The ECB has been looking to get rid of the 500-euro note despite the objections of Germany's central bank, due to concerns that it is also used by criminals and militants to finance their activities.
swissinfo.ch with agencies