The Corner

National Security & Defense

Then They Came (Maybe) For The £50

Early last month, I noted that the European Central Bank had announced that it would soon cease to issue 500 euro ($575) bank notes on the grounds that these wicked bills could “facilitate illicit activities”. With a ’war on cash’ under way, I mentioned that this would unlikely to be the end of the matter.

Now, as Britain unveils a new plastic £5 note, there’s this (via the Daily Telegraph):

The £50 [~$75] note could eventually be phased out of circulation as the Bank of England Governor Mark Carney says there are no plans to produce a plastic version amid fears about financial crime. Speaking at the unveiling of the new £5 note at Blenheim Palace, Mr Carney said there were “no plans” to introduce a new £50 model.The admission comes after months of speculation about the note’s future, following calls from leading bank bosses and financial experts to scrap it.

Earlier this year Peter Sands, the former chief executive of Standard Chartered, who is an adviser to the British government, said eliminating the £50 note would help to combat tax evasion. He added that electronic payments had made the high value tender redundant, with most people only using cash to buy items such as coffee and food goods.

The Governor of the Bank of England, Mark Carney, a man rarely reluctant to align himself with the Davos consensus, has said that “There are no immediate plans for the £50 note…The feedback is that the notes need to be smaller, different sizes, but smaller.”

“The feedback is”.

Excellent use of the passive voice, Governor, and the use of the phrase, ‘the feedback’ is a masterstroke, both authoritative, yet vague.

A few months ago, I looked at the war on cash in a piece for NRODT, making the case for cash—and the privacy it brings—as a vital element in the preservation of the rights of the individual against the presumption of the state. In the course of the piece, I also noted this, also from the Bank of England:

In a speech last September, Andrew Haldane, the Bank of England’s chief economist, grumbled about the “constraint physical currency imposes” on setting negative interest rates. After considering various ways of dealing with this nuisance, he concluded that an “interesting solution” would be to “maintain the principle of a government-backed currency, but have it issued in an electronic rather than paper form.” This “would allow negative interest rates to be levied on currency easily and speedily.” Translation: Make people hold their cash in electronic form (and thus in banks); they will then have no means of escaping the levy on savings that negative interest rates effectively represent.

Worth remembering, I think. 

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