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.
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.