From the Elimination of the 500 Euro Note to Threats Against Iranian Assets

The new directive from the European Central Bank regarding the cessation of printing 500 euro banknotes by the end of January this year and the finalization of the elimination of this banknote worldwide may be good news for the fight against money laundering and the black economy, but it will certainly not be good news for the Iranian economy. According to Iranian officials, approximately 20 to 25 billion dollars in domestic banknotes are kept in homes, and all reports suggest that this amount is in dollars; however, this is not true, as many Iranians around the world have turned to purchasing euros as an alternative currency to preserve their assets, and many who were unaware of the regulations have used this banknote during conversions. Additionally, considering the sanctions imposed by the United States and the Iranian government's official policy of replacing the dollar with the euro and other currencies, and storing at least part of the country's official currencies with these banknotes, if the government does not have a clear management plan or does not announce it, we will witness significant losses. Undoubtedly, many Iranians abroad who have a particular interest in concealing their assets for tax evasion or advancing economic matters are among the holders of these banknotes and must now consider converting their 500 euro notes in light of these regulatory changes. Many embassies and government-affiliated economic and cultural centers abroad also use these banknotes for cash payments to their employees and to meet other needs. Where are the threats? If the Central Bank does not officially provide transparent information regarding the management of this process, we will witness the spread of various misleading news and rumors that could seriously harm the sick and anxious Iranian economy. Certainly, the Central Bank can return part of the cash assets stored in homes to the banking system by implementing policies similar to those of recent months, but this comes at the cost of losses for those who purchased euros at high prices. All exchanges, including legal, semi-legal, and illegal, as well as brokers and physical currency transfer networks, can benefit from establishing a new business, albeit to their advantage and to the detriment of sellers, in the process of this threat. Is this threat solely directed at Iranians? Many foreign embassies in Tehran and other international economic and cultural centers are also forced to pay their salaries in cash using these banknotes due to existing restrictions, as many Iranian or foreign embassy employees are reluctant to receive their salaries in Iranian rials due to severe fluctuations in exchange rates or inflation in Iran, and transferring this volume of money for employees with other currencies and banknotes has its own specific problems, meaning they too must think of new ways to convert these banknotes. Previously, many embassies used legal exchanges in the country of origin to send salaries and meet their needs, but this method has been damaged due to the imposition and intensification of sanctions against Iran, and payments are now made in cash. Undoubtedly, transparency in international economics is commendable, but the policies of the government have effectively classified the Iranian economy in the black sector and defined a permanent front for the Iranian economy. This has also caused a government-nation gap domestically. This lack of trust in the government has created a new economic front within the country, where both sides are primarily concerned with their own interests, and the most significant manifestation of this is the storage of substantial amounts of foreign currency in homes and safes.