The value of banknotes in circulation across the EU has surged from €1 billion in 2016 to €1.6 billion in 2026, highlighting a significant shift in consumer behaviour. This increase comes despite the prevalence of digital payments, as people are advised to keep cash on hand for emergencies. The rise is attributed to heightened anxiety over wars, wildfires, and cyber-attacks, prompting citizens to prepare for potential disruptions in digital payment systems.
Experts note that while cash usage for daily transactions is declining, the stock of banknotes is growing. The European Central Bank (ECB) has indicated that this trend reflects a paradox where cash is becoming less common in everyday purchases but more essential for crisis preparedness. Countries like Austria and Germany have recommended that households maintain a cash reserve of €70 to €100 to cover essentials for at least 72 hours during emergencies.
This shift towards cash is not merely a reaction to current events; it also raises concerns about the long-term implications for financial inclusion. Olive McCarthy from University College Cork warns that if cash is only viewed as a backup, its utility may diminish over time. Maintaining cash usage in normal circumstances is crucial for ensuring its availability during crises, especially for vulnerable populations who rely on it for privacy and security.
The ECB emphasizes the importance of cash in national crisis preparedness, advocating for legislation to ensure the availability of cash machines. As digital systems face vulnerabilities, the growing reliance on cash may reshape financial habits and societal norms, underscoring the need for a balanced approach to cash and digital payments in the future.
Source: The Guardian
