Last week, former Treasury Secretary Lawrence Summers called on countries around the world to stop issuing high-denomination banknotes including the U.S. $100 and the 500-euro note.
He cites a Harvard paper that says the notes have become the “preferred payment mechanism of those pursuing illicit activities, given the anonymity and lack of transaction record they offer, and the relative ease with which they can be transported and moved.” In short, it’s too easy for criminals to carry large sums of money that can’t be tracked.
A million dollars in $100 bills weighs a scant 22 lbs., roughly the same amount as a toddler. The same sum of money in $20 bills weighs a staggering 110 lbs., roughly the same amount as an angsty middle-schooler. By forcing criminals to carry five times the amount of cash, you make their lives five times more inconvenient, according to Summers’s argument.
Eliminating one big bill is a nice gesture, but it won't solve the problem. Anyone can purchase Swiss 1,000-franc notes (worth roughly $1,009 USD) and walk away with an even smaller briefcase. As long as the Swiss continue to refuse to pull the note from circulation, as they seem inclined to do, then it doesn't matter if the U.S. takes action.