International drug cartels have abandoned the US dollar for high denomination euros to launder millions in illegal profits, Europol has revealed. The gangs no longer use $100 bills because €500 notes – the largest denomination of euro – take up less room when transporting large amounts of cash across the world.

In a single consignment on a British Airways plane bound for London from the United States, US police found £11m worth of drug profits in €500 bills. The Colombian and Mexican cartels' conversion to the European currency is even acknowledged in popular culture: American rapper Jay-Z's video for his single, Blue Magic, features a suitcase full of €500 notes as he sings about "the kilo business".

Rob Wainwright, director of Europol, said last week police forces across continental Europe were tracking the movements of smuggled and laundered euros and had traced much of it back to large drug gangs.

"We have seen examples of high denomination notes hidden in cereal packets, tyres, concealed compartments in lorries, and so on," he said.

The scale of the smuggling operation was revealed in figures from the Colombian National Directorate. Only $300,000 worth of euros were declared as entering Colombia between January and June 2007, but over $551m in euros left the country. Once in Europe, the notes can be exchanged for dollars.