mer, Mai 17th 2023
Most of Swiss cash in circulation right is in 1,000-franc bills – and most of those bills are likely outside of Switzerland, according to Swiss National Bank Vice President Martin Schlegel.
“We assume that a good portion is circulating abroad and is used to store value,” Schlegel told local academic publication Die Volkswirtschaft. “This is a compliment and a vote of confidence in Switzerland and the SNB: People trust that our money will keep its value.”
In fact, about CHF50 billion in Swiss francs in circulation is in 1,000-franc bills alone. The 1,000-franc note’s value has fluctuated since it was introduced in 1907, but its worth today is roughly $1,110 or €1,025.
In case you’re wondering how many other countries have single notes that amount to that much, Switzerland sits near the top. Neighbors Singapore and Brunei have had 10,000-dollar bills (worth about $7,000), but both countries have been phasing those bills out for years. Meanwhile, the Euro zone has been phasing out its €500 bill for four years on the assumption that such high-value currency helps streamline criminal activity.
Switzerland, on the other hand, has no plans to do this.
In fact, the overall value of Swiss currency has “strongly increased” from CHF81 billion in October to more than CHF90 billion now, according to Schlegel. Cash use has been on the rise since the SNB increased interest rates into the positive last fall.
“We could have lowered interest rates even further,” Schlegel said.
Swiss consumers like using cash and will continue to do so, even as digital options become increasingly prevalent, according to Schlegel. Unsurprisingly, there is a political movement to prevent Switzerland from ever becoming a cashless economy, called the Free Switzerland Movement or FBS.
Earlier this year the FBS announced that their initiative – to change Switzerland’s currency law to stipulate that a “sufficient quantity” of banknotes and coins must remain in circulation – will be on ballots soon, after the group collected enough signatures to trigger a voter referendum.
FBS says cash is playing a smaller and smaller role in many global economies as electronic payment methods become more routine. The digitalization of such transactions makes it easier for the state to monitor its citizens’ movements, according to the FBS. While voters can push the measure through, Swiss Parliament members would decide how the law would be implemented.
“It is clear that getting rid of cash not only touches on issues of transparency, simplicity or security … but also carries a huge danger of totalitarian surveillance,” FBS president Richard Koller communicated through the group’s website. Koller added that while Switzerland has a chance to encode this into law, getting the EU to approve something similar would entail the “almost impossible” process of securing approval from all 27 member states.
“Cash is freedom” which makes it “an absolute priority for Switzerland,” according to FBS.
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