Publiceret: 12.01.2017Af Peter G. H. Madsen mail
Almost all activities within the illegal drug trade in Denmark take place using large banknotes. Society would therefore benefit greatly if cash were replaced with electronic payments.
This is the conclusion drawn by associate professor in criminology at Aalborg University Kim Møller, who has written a PhD on regulation of the cannabis market.
“It’s definitely criminals who need cash the most. It would be preferable for society at large if everything took place electronically,” says Kim Møller, who cannot recall the last time he last had a DKK 500 or 1000-note in his hand.
Kim Møller has no doubt that the American economist Kenneth Rogoff is on to something when he recommends scrapping high-value notes. Like Rogoff, Kim Møller points out that criminals would be in trouble if their financial activities left electronic traces.
“It’s quite obvious that if you’re going to Morocco to buy cannabis, it’s easier to travel with fewer large notes than with lots of small change.” That’s why criminals like the 500-euro notes so much, says Kim Møller.
See also: Top economist want to get rid of large banknotes
It is a fact that there are still a very large number of 500-euro notes in the economy. The European Central Bank’s (ECB) statement shows that there were 545 million of the highest-denomination banknotes in circulation in September 2016.
The Central Bank has decided to cease issuing the new 500-euro notes at the end of 2018. Notes already issued will, however, still be legal tender.
But it is not only when trading illegal drugs that criminals are fond of high-value banknotes. The notes are also useful when they want to enjoy the fruits of their illicit labour.
“How do you spend a million you’ve earned from trading illegal drugs? One of the things the criminals do is travel abroad with their suitcase full of 500-euro notes and live like kings for a few months,” explains Kim Møller.
The Confederation of Danish Industry (DI) agrees that it is necessary to look at the use of cash and, in particular, high-value banknotes.
- It is crucial that we examine whether it is possible to inhibit criminals and make it more difficult for them to carry out their activities, says Director of DI Handel Annette Falberg, who is DI’s representative in the Payments Council.
The council has been set up by the central bank of Denmark, Danmarks Nationalbank, and forms the framework for cooperation regarding individual and corporate payments.
Annette Falberg notes that the Payments Council discussed criminal use of cash at its last meeting. The phasing out of the large banknotes must, however, be weighed up against the inconvenience it may cause for the average law-abiding citizen and the business community.