Security Implications of Cash
I saw two related stories today. The first is about high-denomination currency. The EU is considering dropping its 500-euro note, on the grounds that only criminals need to move around that much cash. In response, Switzerland said that it is not dropping its 1,000-Swiss franc note. Of course, the US leads the way in small money here; its biggest banknote is $100.
This probably matters. Moving and laundering cash is at least as big a logistical and legal problem as moving and selling drugs. On the other hand, countries make a profit from their cash in circulation: it’s called seigniorage.
The second story is about the risks associated with legal marijuana dispensaries in the US not being able to write checks, have a bank account, and so on. There’s the physical risk of theft and violence, and the logistical nightmare of having to pay a $100K tax bill with marijuana-smelling paper currency.