Why holding physical cash is (soon to be) a crime

Unless you're a criminal, you may never have seen one. And that's why the €500 note has been taken out of circulation. Mark Hughes and Rob Sharp investigate “Goodbye to the note of ill-repute”. Thu 13 May 2010. 

The €500 note is a convenient denomination via which to transport large sums, While £1m weighs 50kg in £20 notes, the same value weighs only 2.2kg in €500 notes. that is why criminals want it, and why it is being banned, Britain's Serious and Organised Crime Agency (Soca) has decided with the Treasury and Home Office to remove €500 notes from circulation in Britain saying there is “no credible legitimate use for the €500 note in the UK” (my emphasis). Soca's ban follows an investigation which revealed that 90 per cent of the €500 notes in this country are being used for criminal purposes. It's the latest of a number of high-denomination bank notes favoured by villains that have fallen out of favour. Richard Nixon halted the circulation of $10,000 bills in 1969 because of their association with organised crime.

Cash then is suspect. There is "no legitimate use for large denomination Euros in the UK". None.  At All. The man from SOCA said so, and he knows, because he knows everything.  Apparently they were able to measure exactly how many of these notes are used by criminals.  SOCA obviously has access to what a French philosopher called 'state magic'.

Recall the Money Laundering legislation.  Recall that whenever you move your own money (over a certain amount - and it depends on the banks in question) in your own account to another of your own accounts (both already checked with passports, bills and other ID checks) all held in the UK, you STILL have to answer to some wonk, who has to ask you what you are doing - or be made a criminal themselves.  Recall that in order to change a £50 note into smaller notes in a bank you must pay the money into your account and then draw it out again - immediately after.  Why? So that it can be recorded. Hmm.

On the other hand cash is a way to hold your wealth, your accumulated fiat, outside the banking system, where it is safe from counterparty, liquidity and insolvency risk.  It is a way to avoid transaction charges, credit card charges, a way of budgeting by counting and looking, and storing.  It is a way to feel confident in your own accumulation, your savings, your nest egg - by having it right there.  It is a way of paying people.  It is a way to move your wealth from one place to another, without interference, without surveillance, without a record, without the knowledge of the state.  Ah, now we begin to see the problems.

Physical notes are suspect.