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Comment by maerF0x0 | Hacker News Reader

> Wait until you hear about cash.

anecdote time: I once travelled to Vietnam for a vacation, people in vietnam prefer $100 bills because they're easier to use for hiding wealth, transporting cross border, and other slightly less than legal reasons. Additionally it's the preferred currency of criminals in the country too (so I heard). They will even pay higher exchange rates for ones in better condition or with more anti-counterfeiting features

So yeah, USD is used for a lot of crime globally.

EDIT: changed "anti-moneylaundering" to "anti-counterfeiting" by suggestion

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In Canada, organized crime holds on to the $1000 notes. They're the largest value banknote commonly used in the West in the last few decades. They were last issued in 1992 and then officially withdrawn in 2000 for concerns over moneylaundering. They're not legal tender anymore, but can be exchanged at the bank. There's about $1 billion in circulation, and that will likely remain true for a long time yet. They move in a closed loop in the drug trade, stuffed in briefcases and in safes of criminals who effectively act as banks settling debts. No one wants to cash them because of the risk of being traced, but because they can be cashed in theory, they retain full value. The €500 is slowly displacing them, in Canada and abroad.

I saw one as a child. Most Canadians have not, as far as I know. An acquaintance of a friend of my father's had several, and my father was interested in numismatics, so he traded one for $100s. The implications of the man who had some "pinkies" (called so for their colour) being a biker with a facial scar didn't click into place until I was much older.

CHF still has 1k banknote (and with negative interest rates this with a safe might be a better option than a bank account).

Hows that better than a bank account? You can hold CHF on a bank account as well and it keeps the same value as the note. (both lose value due to inflation)

Also dont forget insurance for banknotes in a safe.

> Hows that better than a bank account?

GP said it, negative interest rate, i.e. the bank charging you to hold on to your money when you have more than a certain amount (was it 100k or 25k CHF).

So if you put in 100k in the bank and wait a year, you'll be able to withdraw maybe 99.8k CHF. If you hoard 100x 1000 CHF notes, you'll still have 100k CHF. Sure in 1 year those 100k CHF will probably buy less Big Macs then the present, but the 200 CHF loss will mean even less Big Macs.

Its meaningless, if someone puts over 100k on a bank account where inflation eats it away they probably dont care about interest rates and its just a fraction of someone holdings that is deposited at super low risk/high availability. This only makes sense if you have way more and the rest is actually invested and grows. Storing you whole savings like that is rather stupid regardless of if you reach the limit and pay interest rates or not. and putting it as banknotes in a safe is similar stupid potentially even more stupid because there is real chance you physically lose it all.

Yes there are saner things to do with 100k, but GP was just comparing the 2 options, and you asked "Hows that better than a bank account?" and I answered...

Its clearly not better, its worse. You exchange possible interest rates with a rather incalculable risk of total loss or some absurd insurance fees which are likely to be higher. If putting paper in a safe would be better then someone (probably the bank itself) would offer that as a service. If they cant make it lucrative at scale you certainly cant either.

Sigh, you made me regret responding to your initial question.

FWIW commercial banks have had negative interest rates for a few years now.

https://www.truewealth.ch/en/blog/negative-interest-switzerl...

You completely ignore my point and instead provided a proof for what no one questioned.

The regret only grows. Now I'm torn between trying to explain the concept of imaginary scenarios where the scope is limited and crafting a statement with a hidden insult somewhere.

If this were a party conversation, imagine me walking away rolling my eyes and shaking my head...

Most people are not going to invest 100% of their savings in things like stock market (most people might be 60/40 or less).

Cash at a bank is the best you can do in terms of risk free asset (for people in CH it's the equivalent of a bond allocation in a portfolio, just with higher return).

If the sum total of the wealth you are trying to hide is a in the thousands, you aren't who the government is concerned about. At least, not enough for policy changes. So, while cash is likely far more prevalently use in crime, you're talking about the huge long tail of low level drug dealers and smugglers, not the oligarchs and money launderers.

Deposited/electronic money tends to be necessary when you hit a million plus. At that point cash sucks and is super risky to hold.

fun fact, each bill is 1g. So $1M in 100s is 10KG (or 22LBs) . Plus the briefcase and hand cuffs if we're going movie style.

In Uzbekistan, I saw a disproportionately large number of people with gold teeth. When I asked my host about it, he said that that was the older Soviet-era generation that would get gold teeth so that they could carry some useful wealth with them in case they had to flee their homes all of a sudden.

"with more anti-laundering features" ? did you mean anti-counterfeiting? just checking...

I think so. Basically things to make it harder to fake them.

Changed original post

That doesn't stop cryptocoins from being the currency of choice for criminals that need completely anonymous digital transactions, which is why they are the standard for the online black market and for ransomware. It's hard to argue of the advantages of cryptocoins while in the same breathe arguing that cash is better for crime.

The bigger issue is that very few people want to hold onto cryptocoins if their goal is to spend the money. You can't really buy much directly with cryptocoins in comparison to cash which is universal. I can't use it at Walmart, I can't use it at McDonalds, I can't use it to buy a house, I can't use it damn near anywhere. The only way I can use it is through a scheme that converts it to cash first. No criminal wants to add that papertrail step to their operations.

they prefer USD in parts in SE Asia because the local currency has experienced hyperinflation in the past. the problem is there is no easy way for them to exchange overly worn bills back to the Federal Reserve, so they have like rotting old falling-apart $1 bills that look like they're on the verge of disintegrating.

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