Money: billions under the mattresses: amount of cash continues to increase

The frequent calls to doom for the upcoming disappearance of cash are premature: regardless of the steadily decreasing meaning of appearances and coins in everyday shopping, the amount of cash in circulation in the euro area still increases. Central banks and experts assume that cash in three -digit billion value is not issued, but obtained.

Estimate: Four hundred billion euros in cash are stored in private households

According to the Bundesbank figures, the proportion of banknotes held in Germany is around 42 percent, almost two and a half times as high in 2013. In absolute numbers: According to the Bundesbanker, 395 billion euros stored in Germany’s private households – very unevenly distributed, since according to surveys, many households have no or only low bar reserves.

In March, according to the European Central Bank figures, a total of 1.564 trillion euros in cash were in circulation. That was almost 30 billion more than in spring 2022 and even 300 billion euros more than at the beginning of the Corona pandemic five years earlier. The growth rate has slowed down since 2022, but the amount of cash in circulation is still increasing and not decreasing. The phenomenon is called “banknot paradox” in the Bundesbank. It has been observed in many countries for many years, “says a Bundesbank spokeswoman in Frankfurt.

“Until 2021, the growth rate of banknotes was always a multiple of the annual inflation rate in circulation,” says Johannes Gärtner, payment specialist at the business consultancy Strategy &.

The phenomenon is paradoxical because it is well known that the number of people who pay with appearances and coins. In 2023, according to the Bundesbank, half of all payment processes were handled at Germany’s cash registers in cash, but only a good quarter of the entire sales made up.

Electronic payment further on the advance

According to a recent survey by Strategy & among 5,500 respondents in nine European countries and Turkey, the debit card has now replaced cash as the most widespread means of payment – only 23 percent preferred. Many retailers now also prefer electronic payment, especially the contactless person, in which the customer does not have to enter the customer. “This is up to seven times faster than cash payment,” says Bernd Ohlmann, the spokesman for the Bavarian trade association.

“Uncertainty is the driving factor”

But why is more cash in circulation when fewer and fewer people use it in everyday life? “The euro will be heard very strongly,” says Ralf Wintergerst, CEO of the Munich banknote and security technology manufacturer Giesecke+Devrient, who is a good 150 central banks worldwide. “The production volume of the euro is also used for paying, but now also put them away.” The company has been in discussions with the central banks for 20 or 30 years: “What actually happens in the cash cycle, why and what people use cash for?” Wintergerst’s explanation for the obvious trend towards cash shortening: “Uncertainty is the driving factor.”

According to the Bundesbank, the proportion of cash stored for value storage during the Corona pandemic – which was significantly due to the months of lockdowns in the first phase of pandemic: “The increase in banknote circulation in crises – not only during the Corona pandemic – is a frequently observed phenomenon,” says that Bundesbank spokeswoman.

Management consultant Gärtner brings two other factors into play, which allegedly contribute to the increase in cash. “In principle, the growth of the amount of cash cannot be assigned to classic payment transactions,” says the financial expert. “Rather, the reasons lie in a mixture of” Hoarding “, shadow economy and the role as a reserve currency abroad.” “Shadow economy” describes economic activities beyond law and law, whether classic undeclared work or criminal business. For example, the A3 motorway in Bavaria is known for the fact that the police repeatedly come across immense sums of cash: In November, veil investigators found a million euros in the car of a 34 -year -old man, presumably come from criminal shops and packaged in plastic bags.

But even if the importance of cash in the everyday life of the law -like citizenship is likely to decrease, it is not to be expected that in the future only gangsters and coins in the wallet – or in plastic bags – are dragging with them. The Bundesbank has committed itself to maintaining cash and the associated infrastructure. Because cash has undeniable advantages. Last but not least, this includes that notes and coins do not need electricity and no electronic infrastructure. “The central bank must ensure a permanent, resilient payment infrastructure,” says G+D CEO Wintergerst. “If there is war, if there are crises, it must still be possible to pay in the event of floods. Cash speaks for that.”