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Comment by Angostura | Hacker News Reader

I don't see why Germany doesn't handle it the same way as the Bank of England where the chief cashier signs special notes called 'Giants' worth £1,000,000 and 'Titans' worth £100,000,000. These are obviously only used for inter-bank transactions.

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The short answer is that they don't want to make it easy for banks to hold cash; they want the banks to loan the money out (ideally) or deposit it with the European Central Bank where they will have to pay for the privilege in the form of negative interest rates (which is what the banks are trying to avoid by holding the cash).

Wouldn’t that undermine the point of negative rates?

Better to just charge interest on cash stored at banks.

Large notes were used like this in America as well - up until 1934 we had up to 10k notes.

It's my understanding the larger ones were mostly used for storage or transfer?

https://en.wikipedia.org/wiki/Federal_Reserve_Note#Large-siz...

The US has considered doing this for other reasons. It’s an interesting idea.

https://en.m.wikipedia.org/wiki/Trillion-dollar_coin

Why do they need paper money anyway? Is there something more legitimate about a piece of paper with many 0s on it vs redundant electronic storage of record?

They don’t need the pile of cash, and are free to burn it if they want and just write down in an excel sheet: “today we burned 2 billion euros”, now the question is if you’re willing to have your salary paid out in a digital recognition that you now own a part of that burnt cash, because you feel comfortable that others would allow you to pay using those IOU’s of no longer existing cash.

If not, then the current system where the digital records refer to actual cash still needs there to be actual cash somewhere. Normally you’d have it in the national bank, but since they started charging it’s better to stockpile paper.

That's a very helpful illustration, thanks.

I guess it seems...funny to me that the one level of abstraction (paper money representing the power to exchange goods and services) is so much more preferred to the other (digital representation of that power). Already now, most of my money is represented as a digital recognition that I own part of a pile of cash that I will never actually take physically.

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