[dropcap]I[/dropcap]n the United States it’s “all about the Benjamins,” as Puff Daddy’s ode to the $100 bill and founding father Benjamin Franklin goes, and in Colombia it’s now “all about the Lleras Restrepos.” Or maybe the Valle de Cocora.
That’s because former President Carlos Lleras Restrepo and the department of Quidío’s picturesque Valle de Cocora with its iconic palmas de cera adorn Colombia’s newest and largest bill of paper money, the $100,000 peso note.
The bill officially went into circulation during the last week in March, and is the first in a string of redesigned peso notes expected to start printing throughout 2016.
But far from a simple makeover, the $100,000 is a substantial jump in value, doubling the previous largest cash peso note. So why does the Colombian economy, which by some measures has had a rough few months, need a bigger bill?
“Since the year 2000, when the $50,000 peso bill was first printed, Colombia’s gross domestic product per capita has tripled, and the minimum wage more than doubled,” said José Darío Uribe, general manager of the Banco de la República, Colombia’s central bank, in a statement on March 31.
“As a result of that growth, among other variables, the quantity and volume of economic transactions has grown over the past 15 years, while the denominations of bills in circulation have remained unchanged.”
But it’s not just economic growth that demands a larger bill, inflation has played a role as well.
“The new bill is needed for market dynamics, the prices of our goods and services and the inflation accumulated over 15 years,” explained Luis Fernando Ramírez, economist with the Universidad de la Salle.
“But it certainly is a bill designed for high-value transactions, and not for smaller payments that might require change to be given,” he said.
That’s no small concern, as anyone who has struggled to get change for a $50,000 peso note at the corner store might know all too well.
But Banco de la República representatives clarified that the newest bills will be only a relatively small percentage of those printed over the next year.
“During 2016, [Banco de la República] will produce more than 1 billion bills, of which 288 million will be high denominations (59 million of $100,000) and 795 million of lower denominations,” revealed the bank in a statement last month.
In other words, $100,000 peso bills are to meet a calculated demand rather than just to get a smaller stack of cash at the ATM.
But the new pesos also help prepare Colombia for a potentially more significant economic change.
Legislation has proposed dropping three zeros from every peso denomination, creating a “new peso” that could line up more closely with world currencies like the U.S. dollar.
The $100,000 peso bill notably reads “100 mil pesos” instead of “100,000 pesos.”
“This would facilitate the coexistence of ‘pesos’ and ‘new pesos’ during a transition period,” said Banco de la República representatives. “The designs of the new family of bills will stay the same in the event that this legislation passes.”