At a time when cash is being used less and less, and large banknotes, in particular, are increasingly being phased out, the Swiss National Bank is standing firm. SNB Vice President Martin Schlegel sees an essential function for this “traditional form” of transaction and store of value.
Digitalization has changed people’s payment habits and put pressure on the use of cash. Still, “it is important that cash remains widely accepted and easily accessible,” said Martin Schlegel, vice president of the Swiss National Bank (SNB), according to the text of his speech at the Financial Market Stability Forum in Liechtenstein.
The use of cash declined significantly in Switzerland between 2017 and 2020. Around 70% of all transactions were still conducted in currency in 2017, but by 2020 that figure had dropped to just 43%, Schlegel said. This trend is likely to continue, as the majority of respondents in a survey conducted by the SNB believe that cash will be used less frequently.
Asian countries are not the only ones eliminating large banknotes. Meanwhile, one G7 country has also followed suit. In May 2020, the Bank of Canada stopped issuing $1,000 notes (worth $716) and began withdrawing them from circulation as part of its campaign to combat money laundering and organized crime.
One of the law enforcement agencies involved in this decision was the Royal Canadian Mounted Police (RCMP). According to the saying, the “Mounties” always get their man, the criminal. Perhaps the action helped catch some nefarious money launderers.
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