[Dave Birch] I saw a picture of one of the new £50 notes in the fish-and-chip shop today. It was on a poster on the wall, advising passers-by on how to tell real from counterfeit £50 notes. It should be easy, because apparently the notes have all sorts of security features. You can read about them here to prepare for the unlikely contingency of someone proffering a £50 in a non-criminal transaction.

New-style £50 Note (Boulton & Watt) – Security Features

[From Bank of England | Banknotes | Current Banknotes | New-style £50 – Security Features]

I didn’t ask, but I doubt that the fish-and-chip shop will take them. It has a chip-and-PIN machine already, and the risk of accepting a phoney £50 must be quite high. Why bother? According to the Bank of England, of the £52 billion of Sterling banknotes “in circulation”, about £10 billion are in the form of £50 notes. So £50 notes account for about a fifth of the cash in the UK, but I’ve not seen one, not even one, for at least a year. ATMs don’t dispense them, shops don’t want them and apart from money launderers and corrupt politicians, no-one wants them as a store of value (or, at least, no-one who understands rudimentary arithmetic).

Although I live in quite a deprived area of Surrey (Woking), I shouldn’t think many people popping in to buy cod and chips twice don’t have a debit card, and if they don’t then it probably won’t be a hardship to limit them to £20s. Obviously, being Woking, we are near some very rich parts of the county and bankers may well come by with wads of £50s to buy cocaine from time to time, but even so, the impact of not accepting £50s is rather limited. This made me wonder why there was a new £50 note at all, since we clearly don’t need them. I can’t even remember the last time I ever had one. In fact, I can’t remember ever having one.

The Bank of England wanted to introduce a new-look £50 note with enhanced security features.

[From Design space: £50 banknote – FT.com]

Why? Surely the most-enhancing security feature would be to stop printing them. There must be some other reason why the central bank persists with high-denomination notes. This is not simply a UK phenomenon. When I was last in Canada, I noticed that many shops were refusing to accept $100 bills. None of these shops, as far as I can see, were going bankrupt because of this so the $100 bills are clearly, therefore, not needed for commerce. So why is the Bank of Canada wasting time and money (three hundred million of their Canadian dollars) on creating notes that will only be used for tax evasion and various criminal enterprises?

It is a revamp of Canadian money that begins now and will last for the next two years, as the country’s first polymer banknotes – made of thin pieces of plastic rather than paper – are put into circulation. The first denomination to get the makeover is the $100 bill, which began circulating a few weeks ago, followed by the $50 note in March and smaller denominations in 2013.

[From Funny money: How counterfeiting led to a major overhaul of Canada’s money – The Globe and Mail]

In Europe, governments have begun to realise that the internal struggle between the seigniorage income form issuing notes and the tax losses caused from their circulation must finally be settled in the public interest. Look at what happened in Greece as soon as the technocrats were in control.

Under the new rules all payments in cash will be forbidden above a €1,000 threshold. The threshold was previously fixed at €2,500, surely a bit too high for a country struggling with endemic tax evasion like Italy;

[From Open Europe Blog]

The European Central Bank’s insane policy of printing €200 and €500 notes will surely undermine the efforts of Greece in this regard. No sane retailer in Europe accepts these notes (largely because of the risk of counterfeits) so they are only used for tax evasion and similar nefarious purposes. The mention of counterfeits reminds me of another recent story.

“India faces an increasing inflow of high-quality counterfeit currency, which is produced primarily in Pakistan but smuggled to India through multiple international routes,” said the 2011 International Narcotics Control Strategy Report of the State Department.

[From India faces increasing inflow of counterfeit money: Report – Economic Times]

This is surely another good reason for getting rid of £50 notes: they are an obvious attack vector for our enemies! I couldn’t tell a real £50 from a fake sent in by Kim Jong-un to devastate our economy through a pandemic of unauthorised, freelance quantitative easing and I doubt that you could either.

These are personal opinions and should not be misunderstood as representing the opinions of
Consult Hyperion or any of its clients or suppliers

 

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