The European Central Bank stops producing new 500 Euro bills since 2019 and it will withdraw the notes it gets back. Already today, many shops no longer accept 200 and 500 Euro notes. Banks only change money by depositing it into a account and then picking it up in another denomination. But 50% of the euro cash holdings are located outside the eurozone and are hoarded there mainly because the currency of their own country is constantly losing value. Approximately 21% of the cash holdings consists of 500 Euro notes. Three years ago it was still 27%. It is likely that the 50% outside the euro zone will not consist of coins or small banknotes. But if foreign savers are unable to get their money back, because they do not have a bank account in the euro area, and therefore cannot switch and cannot shop with their large banknotes, confidence in the European currency will be shaken.

It will probably be possible for a few more years to return the big notes to the national currency. But the foreign savers do not trust their own currency and will then exchange their money in perhaps US dollars. But you have to buy foreign currency more expensive than you can sell it. The difference is about 5%, which loses the saver in back and forth. However, this is still cheaper than to travel with the money in the euro area and it there by acquaintances on their bank account (the foreigners have there no bank account) to change into small notes. Often there is a foreign exchange management, so that the return to the national currency is probably possible in full, but not the renewed purchase of the foreign currency. In addition, many savers want to remain anonymous. So you should start thinking about how you want to protect yourself from losing value in your savings.

The ECB should also think. She has an interest in the fact that the over 500 million 500-euro notes, which are to a large extent in vaults abroad, are not exchanged against 2.5 billion 100-euro bills, which they had to reprint. For this, however, the confidence in the value of the big banknotes must be maintained. It must create a structure so that foreign savers can swap their 500-euro notes for free (or cheap), discreetly and unbureaucratically in 100-euro bills. In the major countries with large amounts of euro cash, notably Russia and Ukraine, trustees should maintain greater cash holdings of 100-euro notes in order to credibly offer the exchange of large notes.

It could also be worthwhile for German banks to take over the large bills - also in no longer perfect condition - from abroad. They would have to point out the risks in the media and promote the takeover. In times of negative interest can be stored with 500-euro notes, the 5-fold amount of money without negative interest in its own vaults, as with 100-euro notes. The costs for the logistics of exchange in non-euro area could be compensated. If this option were to succeed, the ECB would have to bear the costs of printing the additional 100 euro bills (for instance, doubling its current volume) and, at the same time, reducing the yield from negative interest rates.

It will be interesting to see how the ECB, banks and foreign savers will deal with the de facto abolition of the 500-euro notes.