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100 million pound banknote

Deep in the vaults of the Bank of England are banknote, legal tender, for 100 million pounds each. These may be the most valuable banknotes in the world.

Bank of England

Images George Rex from London, England [CC BY-SA 2.0], via Wikimedia Commons

Okay, I’ve written before about the highest denomination of banknotes in history, but thanks to hyperinflation those were not actually that valuable. The 100 million pound banknote, nicknamed the Titan, is exactly that valuable.

(What can 100 million pounds buy you? Well, at the current price you could get 14.6 million kilograms of Wensleydale Cheese from a Tescos supermarket. Now that’s purchasing power.)

There’s actually a good reason that such a banknote exists. You see, banks in Scotland and Northern Ireland are legally allowed to issue banknotes. Commercial banks in England used to be able to do this as well, but the Bank Charter Act 1844 consolidated this right into the Bank of England. Scottish banks got an exception, as did Northern Irish banks in 1928.

The Scottish and Irish banknotes by law have to be backed by something valuable. This makes sense: if the bank goes out of business, physical backing assets prevent the banknotes from immediately losing their value. But this also introduces a problem: how can you back such an enormous amount of currency?

The solution is to print up equivalent banknotes in pounds sterling, and keep it in a vault as a guarantee of the notes’ value. If you use normal banknotes, that’s a lot of precious vault space taken up. Instead, you print up a few special banknotes and boom! problem solved. And because, I guess, vault space is at a premium, these banknotes are worth 100 million pounds each.

Now, I know what you’re thinking. You’re going to write a screenplay about a heist or caper involving these banknotes. Good idea, go for it. Can I suggest that you cast Denzel Washington? He was very good in Inside Man.

[Thanks to Eric M. for suggesting this topic.]

Categories: Economics & business Europe Places

The Generalist

I live in Auckland, New Zealand, and am curious about most things.

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