Israeli officials are being requested by Prime Minister Benjamin Netanyahu to discuss the future of the 200-shekel note. The call to action centers on the contention that eliminating the note would help in the ongoing battle against tax evasion and money laundering. The 200-shekel note is the nation’s highest denomination note.

If the note were eliminated, the Bank of Israel would announce a short period for it to be redeemed or deposited before losing legal tender status. The brevity of the period is an important step, according to bank officials, who stated that limiting the time  would “not allow the bill holders to take preventative measures and to encourage them to participate in the Tax Authority’s voluntary disclosure program as the only way to prevent the loss of their money.”

The action would require the voluntary disclosure, as depositing the sums would include temporary immunity from criminal charges of failure to report income and allow payment of a lower tax without penalty.

Opponents of the proposal point out that hoarding the 100-shekel note (which would become the highest denomination), other valuables, and decentralized digital currency will replace the hoarding of 200-shekel notes, leading to additional issues of enforcement. A study by the European Central Bank in 2008 found that only one-third of the highest denomination notes in circulation were actually used by the public for payments and transactions, while the rest were hoarded.

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