Euro Banknotes Surge Amid Fears of Digital Payment Disruption
The European Central Bank (ECB) has noticed a surprising trend in recent years. Despite the growing use of contactless payments and digital payment methods, the total value of euro banknotes in circulation has increased from about €1 trillion in 2016 to €1.6 trillion in June 2023.
This rise is attributed to people's concerns over emergencies such as wars, cyber-attacks, floods, storms, and other hostile events that may render digital payment systems unavailable.
According to the ECB, more than 31 billion banknotes are currently in circulation, compared to 24 billion before the pandemic in 2019. European countries like Austria, Finland, Germany, Sweden, and the Netherlands have even recommended keeping between €70 and €100 per household for emergency cash.
The ECB's chief economist, Philip Lane, noted that 'the total stock of banknotes is continuing to grow,' while transactions are decreasing. This means people are holding more physical money than ever before, despite using fewer banknotes for daily purchases.
The ECB emphasizes the importance of maintaining access to cash and has proposed new euro banknote designs, which will be selected through a public survey by December 2026.