Why Singapore will stop issuing S$1000 Notes
In a move inspired by other major jurisdictions, Singapore’s Monetary Authority will from January 2021, no longer issue $1000. The Monetary Authority(MAS) of Singapore has explained that the move will help curb terrorism financing and money laundering risks associated with the circulation of such a huge denomination.
A statement released by MAS on November 3, 2020 revealed that although financial institutions are allowed to recirculate the existing $1000 notes which have already been deposited, the Authority will drastically limit the number of $1000 denominations it issues each month. It added that other smaller denominations, particularly the $100 note will be made available to suffice its demand. Circulating $1000 notes can still remain legal tender and can be used for transaction until it completely fades out in 2021.
Since the major reason for the move is to reduce the risk of terrorism financing and money laundering activities that are propelled with the availability of such large denominations, the MAS urged the public to utilize electronic payment systems instead. Considering the value of the $1000 note, it is easier for money launderers to anonymously handle huge sums of money, whereas the use of e-payments is more secure in terms of technical tracing and physical security.
Singapore was issuing $10,000 notes, one of the most valuable banknotes globally, until October 2014 when it stopped. The reasons for discontinuing its use were similar; secure and advanced electronic payment systems had been developed and there was less demand for high-end cash transactions.
Other major jurisdictions including the United States, Europe, Canada, Malaysia and Brunei have also stopped issuing larger denominations due to the same concerns. The country is also sailing on the advice of economic experts who support the idea of phasing out huge-denomination notes to prevent financial crimes such as corruption and tax evasion.
Currency collectors predict that the dwindling supply of the $1000 note will result in an appreciation of its price by at least 5 to 15 per cent.