Bitcoin Forum

In my country during the year 2016, 8th November the government announced currencies with highest denomination like 1000₹ and 500₹ won't be valued anymore. People are supposed to reach the banks and exchange it to any other denomination. In the event of this people suffered much, because there is no money to spend and banks were full of crowd. More than 100 lost their live standing in queue.

Whats the reason for such an immediate decision ?

If there is validity or expiry for every currency same as day to day life needs, then people will make use of it and exchange to new currencies at the right time. This way everything can be made to be in circulation rather than getting accumulated for years. Here black money can also be avoided.

Nah,the criminals will just exchange the currency that has an expiry date into foreign currencies that don't have expiry date(or other financial assets).It's that simple...
I was thinking about such idea years ago.Such currency will boost the consumption and lower the money savings,but the people will just prefer to buy real estate and other financial assets,instead of keeping their money.At the end of the day,this seems like a pointless idea to me.

I don't think that it is the criminals that are the reason for removing some denominations too, maybe the problem is the cost of printing those amount seems to be a problem economically. I don't think that it is an expiration, it is more like phasing out. Putting expiration on currency value will not be a good strategy for long term prosperity in a country, economy needs to inflate for it to grow.

A bill with an expiration date does not become worthless suddenly. Clearly its value would decrease over time until, just before the expiration date, it was next to worthless. Think about it: how much would you pay for a $1 bill that expires in 5 minutes? Certainly a lot less than you would for one that expires in 6 months.
This constantly changing value would make it hard to use as a medium of exchange. Whenever buying or selling something, one would have to look not just at the face value of the bill, but also at the expiration date, to be able to calculate its real value. People would probably start carrying calculators next to their wallets.

It makes no sense for a currency to have an expiration date, any unit of a currency has to always be fungible and have the same value (1X=1X) forever. What governments have done (changing the bill, removing zeros from their currency, etc.) are very rare and special cases that need the special action that was taken. It is a one time thing too, where people are forced to swap their old bills with new bills.

Was the money or currency denomination created because of criminals or was it created to suit the economy of the country. Even with that implementation, the criminals will still go to the bank, and exchange the money thus I don't see the government wining in that aspect, but however I think it has to do with operational and manufacturing costs. Now, bringing this idea to the crypto space, it can't work that way because the team might end up lossing, let's say a certain team implements it and you own such token, you can easily exchange it to another crypto like Bitcoin so when it expires what will the team do? Mint another? Bear in mind that, black money can also be used to buy valuable assets, so the idea isn't looking for a way to stop or avoid black money but to make a crypto valuable that it can be used to purchase goods and services.

I actually see this is similar to the occurrence of inflation where the currency does not have a high value to the economy anymore.

Then HODL would be meaningless when crypto havr an expiry date.
And those who would forget to change their crypto would loss a lot because of it those who doesn't check their wallet from time to time could lose their investment.
It would affect the crypto too much I think people would try to avoid it or some who are already in crypto would just quit.

Thats true, people are forced to swap old bills with the new ones. Why can't the government do the swapping at regular time interval providing an expiry. The government stated the swapping of old currency with the new ones as a reason to find all the black money. Even after such a swap the government failed to get back the black money into circulation.

I believe even if you place those parameters it still won't stop terrorist group or those person or organization assisting them because they would surely find a way to bypass the expiration and validation if it is implemented and will find loopholes and exploits to continue their assistance. There would surely be some backer behind that can manipulate those parameters which can bypass the policy.

Isn't that gonna require centralized institution though. I mean, if we're using cryptocurrency which is supposed to be decentralized that kind of defeats the point. Also, giving expiration like that have no proof of countering illegal funding of terrorism, we don't even know whether it really works.

Moreover, cryptocurrency market is really competitive. Once the user get burdened by the complicated process they simply moving on to other cryptocurrency.

Maybe gonna work if it's paper money issued by government, however the more it gets complicated the more people hesitant to use the money.

If I am right.... you live in India?

I know they did that to flush out the money launderers and the people who stashed away millions acquired through illegal activities. So how it works is this.... if you have millions in large fiat currencies stored away to be slowly laundered back into the economy... you are now fcked, because your hand is forced to exchange those old large notes for the new currency ...and once you do that, the Banks can link you with large amounts of cash. (The government can then hunt you down for the taxes and they will ask you to explain it)

Let's say you robbed a Bank and you have millions hidden in some place in $100 notes, then you are forced to exchange it and that is where you will get flagged. If you do not do that, then the money is worthless in the future.  ;)

Removing denominations might not only be because of criminals, also it might be to remove them circulation so that new ones can flow into the system. If currency carries Expiry Date, it will cause havoc and waste of resources.

Yea, that happened in India I have remembered when I was abroad and my Indians colleague had been talking about it. Of course, they were blaming the current president of India because they held a few notes which were necessary to exchange. I don't know if such a decision is right or wrong, but those who have been earning legally shouldn't fall into a problem. Because they have earning sources and they are paying tax, so any amount they could exchange. But who have black money, problems for them. In this angle, the government took the right decision due prevent corruption. Although it was quite a hassle for the general citizen, but criminals were thrown their black money somewhere else. But don't worry, it wouldn't happen to cryptocurrency.

Putting an expiry date in currency notes will not be of too much help in to hold back the black money as the cash (currency notes) which is obtained by any person without declaring it to government is usually converted into other form by investing it in gold, precious stones, real estate, foreign currency, foreign investment and etc.

I remember that time actually, it really wasn't that long ago. The way it was just suddenly announced overnight also was quite reckless from the government. I understood it completely, because money launderers and black market illicit activities all keep their stash in thousands of these bills so the government wanted to smoke them out with no grace period. But poor people suffered in the end.

But the reality was ,they knew before hand and all of them used some government employees only to change their black money to white.
The usage of illegal ways to convert the currency and absolutely NO PLANNING lead it as a complete failure.

Didn't heared such action in our country though there are some instances that old printed bills exchange to a new one especially if a new admin is seated but I guess this is common to any country as well, but not for such reason like op.

That won't prevent the use of black money and not too much help either imo, cash money can be obtained by anyone even without declaring it to the authority so it will be transferred person to person and that would be a pain in the ass to identify such money as black money so it makes no sense.

That is a bad way to go about removing certain denomination from the system. Your government deliberately do that and I do not think this will happen in advanced country because they will not put their citizen in such a horrible scenario. I could remember vividly when my country want to change from normal paper currency to polymer currency, they give lengthy period of time to do that and this is to prevent some of the challenges you have mentioned below. I do not see reason why a legal tender should have expiry date unless there is a need to change the quality of the currency. remember a lot is also spend to produce this currencies

Nope and nope. Such currency will not solve any of the mentioned problems but will create new ones. Why should I choose to invest my money in anything that I can lose if I forget the expiry date when there are so many 'normal' options??

Maybe your government is gonna issue a new note and they give people an ample time to exchange or surrender their old notes as the time will come it will not be accepted anymore. It happened in our country too, some people forget to exchange their old bill and after the given deadline those money are already worthless.

The problem is when you are saving paper money and you are not informed with that news, you'll lose the value of your money and that will be a big regret. The right thing to do is just open a bank account, keep your money in there rather than keeping it yourself which is very risky.

How can everything be in circulation? You just change old paper with new paper, that's all, it has nothing to do with the circulation. If we think about something like spend your money or it will expire, then it's a terrible idea because with that law, investors won't exist (you have to collect money before investing in something). And money exchanging very often the way you mention is terrible too, there was such thing in some post-soviet countries because of inflation and bad politics. From what I have heard, it didn't boost circulation, was just a terrible idea to make people's hard life even harder.

I tend to agree, just might replacing the physical money with a new one or phasing out the old design and must put a new one.  That isn't an expiry date of a currency, because if any currency that has an expiry date will become unacceptable to the community, what if they store old currency and they forget to exchange it with the new one.  It seems the same here in our country, but people still can exchange their old currency directly to the bank with the same amount.

And I think, that isn't a perfect way to combat black money, individually can use the currency without knowing by the bank or any financial institution that declaring the transfer of fund.

If crypto has an expiration date then what is the fate of people who invest long term and require us to invest short term and in my opinion that is bad, and if we forget the expiration date then our assets in the wallet will be lost and it is very loss.

This is definitely a bad way to remove a certain denomination from circulation, telling people to rush to the bank to change the currency in a short period of time was a really bad move by the government  :-X, personally I don't see any good reason for them to remove a currency from circulation except they are planning to change the form (maybe from paper form to polymer form), I also wonder why a currency should have an expiry date  :-\.

Its still a no-no move, as there are still innocent people who will suffer from this. The government was not supposed to be like that in the first place. Its like choosing for a lesser evil, and they shouldn't even think about it.

They shoul've make alternatives as they already have intels on possible suspects for illegal activities.

I agree one hundred percent. Like I said, I understood the motivation behind it and in a way I can agree but that's because I'm lucky in the middle class and not affected. But this is India and this is the government, who rarely does things for the benefit of the many people. They probably had to bow down to some political desire from abroad. UN or whatever who wants always every country to do things right as if they were all Denmark or Sweden.

If you want a currency with an expiration date, feel free to create one.  Doing so will necessarily expose you to the fact that most people won't want something that will expire at a certain date and trade it for something of value that doesn't expire.

If enough people agree with you that it is a good idea, they'll join you, but in all likelihood few people who consider the impacts will not.

I first had to deal with this when I went to live in Hungary for a year. In my own country, it's a very rare thing for banknotes to have an expiry date. It's usually just that they stop making the banknotes of a certain type and every time you use one in a shop of other business, they don't give it back to you. So the collection of the banknotes doesn't fall on regular people, it falls of businesses, I guess. But withing my year in Hungary there were a couple of banknotes that were close to their expiry date! I used those I had in the shops prior to the date, but I still had to go with a friend of mine to a bank one time when she had an old banknote.
It's good that with cryptocurrencies it's not an issue at all because it's impossible to make counterfeit crypto due to the nature of how blockchain works.

Not even evident even in fiat to the majority of currencies in the globe, so I guess it would be nonsense to do so especially because we are talking about a currency. Circulation of a currency is not something being forced, it will go along as long as it is being used and it will not be a good idea if it will have an expiry date because it would be somewhat of a hassle for those people who are just saving outside the banks to exchange it to a new one every interval. The Idea is there but I guess this will just show low governance in such way.

Funny what the government thinks will work....I will tell you what really happened. I was back in India for 2 months and I live in a small village and there the people with black money paid like 50-100 Rupees to poor people to stand in the line and exchange their money.

This is literally what happened and the people escaped very easily. For them or was an amazing time to convert the black money into the white money.

Now I do think this didn't help much but maybe in some cases it did , but we cannot consider that a universal statement and start worshipping what they did. I did find it utterly useless since the government doesn't know how the local people works. Had it been known that this is happening it would have saved a lot of trouble for sure.

i guess for now , something like that will not happened anymore, since many many alternative currencies avaliable for sending huge money, like what i heard about week ago, In 2019, criminal activity represented 2.1% of all cryptocurrency transaction volume, or roughly $21.4 billion worth of transfers.

Currency with expiry is making it a product. Currency is a medium of exchange that is in circulation. When an expiry is provided, this will surely cause a disturbance in the circulation. This will cause economic downturn and once again the sufferers will be the low level people.

Beyond this there is big spending, periodically the government is supposed to spend millions in printing new currencies and taking back the old ones.

The exchange of currency from the old to the new is most often caused by economic problems, since if the state does not have problems with money circulation, then nothing should happen with the currency itself. Here, in my country, the currency was updated, but at the same time the old one was retained. This was done for a greater turnover and economic growth inside the state itself.
There is nothing to worry about, unless the state spends a little money. New bills will be more pleasant to hold in your hands)