The Elimination Of High-Denomination Bills

as per your last sentence. Sometimes that is what is surmised what will be the end of cash for the most part. Even children's lunch programs in many schools use a card or pre paid lunches. I recall a school using a thumbscanner in an article I read in the beginning of the school yr.

The lowest amount of cash in circulation any nation has ever managed to achieve was 1% of Gross Domestic Product (GDP) which Iceland had for nearly two decades.

I calculated one way Sweden could achieve 1% GDP using it's current six denominations of banknotes. Numbers are notes per capita. You would have to drop from current 28 notes per capita to 23 notes per capita (in the amounts below).

The dominant denomination by number of notes would be the 200kr = $24.11 banknote, but by value the 200 and 500 crown notes would be almost same (8*200=1600 crowns per person, and 3*500=1500 crowns per person).

			 number per capita		
Sweden	:	US$	:Today	--->	1% GDP
20 kr	:	$2.41	:8.8	--->	5.0 20*5=100
50 kr	:	$6.03	:2.2	--->	2.0 50*2=100
100 kr	:	$12.06	:6.9	--->	5.0 100*5=500
200 kr	:	$24.11	:0.8	--->	8.0 200*8=1600
500 kr	:	$60.28	:9.0	--->	3.0 500*3=1500
1000 kr	:	$120.56	:0.4	--->	0.2 1000*.2=200
TOTAL			 28.1	--->	23.2  4000 crowns

I don't think even Swedes will be happy if the cash supply goes lower than 1% of GDP.

The 2015 USA GDP is $17,803 billion, so 1% would be $178 billion. There are $171 billion in $20 circulating, so it just under 1%.

No one I know believes for a single minutes that the ''official reasons'' for the end of the €500 note are the real reasons.

Draghi and his cohorts just want to make it more difficult for everyone to store value (in cash). He and his allies need to make it more easy to be able to enforce negative interest rates.

Besides, the €500 note was never very popular in the countries that had weak currencies in the pre-Euro era (we know who you are). The €500 was pushed by the German Bundesbank, supported by Austrian and Dutch central banks -- banks/countries that had high denomination value banknotes in the pre-Euro era.

Lately, the Bundesbank has lost lots of influence in the ECB council. So, despite being against the move they went ahead anyway.

I've heard that some European collectors will now start to hoard some 500 Euro note in unc.
I don't know if this will make sense, because there were many notes more printed compared with the higher denoms ($500, $1,000, $5,000 and $10,000) in the USA.
But on the other hand I see no disadvantage to grab some and put them aside for later years...

At the end of 2015 the government reported these quantities (in numbers of bills) for the circulation statistics for the four high denomination banknotes
283,998 $500
165,339 $1000
353 $5000
345 $10000
At least 10 of the $500 bills and 12 of the $1000 bills were turned in during the previous three months. It seems that some collectors decide they can't get anything for them trying to sell them, so they just turn them in for face value, and the BEP destroys them. Now obviously these quantities are insignificant as the circulation of the current denominations are in billions of notes.

11 billion $1
1 billion $2
2.6 billion $5
1.8 billion $10
8.2 billion $20
1.5 billion $50
10.6 billion $100

If you believe that the $2 bills in your drawer will one day be valuable, then try counting to a billion.

The weight of the bills in a briefcase argument is actually pretty weak. It is true that if you are smuggling money in a body cavity it would be nice to have a 500 euro banknote instead of ten 50 euro banknotes, but that argument is very secondary to money policy. It's true that criminals prefer big denomination bills, but they would adapt

Sweden has eliminated all but a token number of 1000SEK banknotes ~ US$120. They have removed over 90% of them from circulation. Sweden has completely eliminated the 10,000SEK banknote in 1991. Unlike the high denomination bills in the USA if you still have one, it is not legal tender anymore. In the USA you can turn in your $1000 banknote and get $1000 in smaller denominations.

The Riksbank has greatly reduced the number of 500SEK banknotes in the past several years. But more importantly they are not replacing the value with smaller denominations. THAT MAKES A DIFFERENCE! The ability of people to store value in currency is rapidly diminishing. What is not so surprising is that Sweden's Riksbank has the largest negative interest rates in the world. Swedish commercial banks have almost no cash on hand compared to the rest of the world. There is no federal regulation (as in the USA) requiring banks to keep a certain amount in their vaults.

I would think if they were valuable, the bank employees would take them. To the best of my knowledge the commercial bank employees are not obligated to turn them into the BEP. I think once the BEP gets them, employees have to see them destroyed, and cannot purchase the note.

If there are 20 million of these notes for a country of 11 million people, there is no telling how long it will take them to introduce the bills. Some nations faced with the problem of a banknote that has relatively low production as banknotes go, but too high for their circulation needs, simply purchase a ten year supply all at once. Particularly because most nations buy banknotes from foreign sources.

The UK introduced the £50 banknotes on March 20, 1981, and by the time they retired the original edition on Apr 20, 1994 circulation of the second edition was still only 62-65 million (roughly the same as the country's population).

On October 24, 2013, the Bank of Iceland announced that the new 10,000 krónur banknote (~$81) were printed by De La Rue Plc. in the UK. Four million banknotes were printed at a purchase price of 29 kr. each. Obviously 4 million * 10,000 krónur = 40 billion krónur. At the end of 2012, the country was circulating 42.5 billion krónur in banknotes of all denominations. Iceland still aren't circulating much above 2 million of the notes, but they are replacing the 5,000 krónur banknotes.

So Bolivia may do something similar.

So the 500 zloty is worth 114 Euros in exchange and has the purchasing power of 200 Euros in Poland. So with the ECB not producing the 500 Euro in the next series (only the 100 and 200 Euro note), Poland is keeping more in pace with the rest of the continent. The 200 zloty note ~ 46EUR.

There are critics of constantly printing new denominations. In Mexico, when the 500 peso banknote was introduced in October 1994, it's value was initially higher than a Benjamin, but fell to US$100 within two months. The 1000 peso banknotes was introduced in November 2004, when it was worth US$88, but by then the 500 peso banknote was the primary banknote in the economy. The 500 peso banknote has now fallen in value to ~ US$27. but there are still twenty 500MXN banknotes to one 1000MXN banknote in circulation. The critics feel that the government is encouraging inflation by printing larger and larger notes. I suspect that is somewhat naive, as denominations of banknotes tend to follow inflation, not cause it.