International Security Ligue

February 14, 2025

Updates

Cash

In their presentations at the Bundesbank's Cash Symposium Feb. 5 in Berlin, Burkhard Balz of the Deutsche Bundesbank and Doris Schneeberger of the European Central Bank confirmed that cash is still the most widely used means of payment, not only in Germany but also in the euro area—with differences in usage patterns across Member States (see “What the European Central Bank Just Learned When It Surveyed Companies About Cash”). Meanwhile, Member States that were early adopters of a cashless society have realized that this could have an impact on security, stability, and sovereignty and are currently trying to put in place legislation to protect cash and its critical infrastructure.

Balz stressed the importance of maintaining access to cash and the availability of the critical cash infrastructure to ensure cash can play its proven stabilizing role in times of crisis. He also pointed out that it would be less costly to maintain the critical cash infrastructure than to rebuild it when needed (as was the case, for example, in Sweden).

Concrete measures are needed to halt this trend. According to the 2024 ECB “Study on the payment attitudes of consumers in the euro area” (SPACE), an increasing number of citizens said they’re not satisfied with their access to cash. Two-thirds of people want to continue using cash, and more than 70% of users want to use it more in the future. However, the ECB’s SPACE study discovered that acceptance of cash is declining. In the public sector, which Balz believes should serve as a role model, the acceptance level only stands at around 50%, even though—in another Bundesbank study—shops said that the costs for payments in cash were the lowest.

Balz therefore called on all market participants to work together to preserve the critical cash infrastructure, reminding the audience that the time to act is now, before it is too late.

The time to act is now, before it is too late — Burkhard Balz, Deutsche Bundesbank

Heiko Thoms, State Secretary at the German Federal Ministry of Finance, emphasized the benefits of keeping cash in circulation, as it is a symbol of culture that cannot be achieved by digital means of payment. In addition, cash offers the advantages of freedom, independence, constant functioning, resilience, and availability in times of crisis. He further stated that cash ensures privacy, is a store of value and helps with financial inclusion. Thoms stressed that the German Federal Government welcomed the single currency package to secure the legal tender status of cash with broad acceptance.

In her presentation, Doris Schneeberger noted that cash is far from disappearing, with the volume of cash in circulation increasing year on year—currently amounting to EUR 1.6 billion per year in the euro area. According to her, the public debate on cash has caused a growing number of people to recognize the importance of cash, as it provides security, resilience and is the least costly. “‘No-cash’ signs are clearly not wanted by the ECB,” Schneeberger stressed.

‘No-cash’ signs are clearly not wanted by the ECB — Doris Schneeberger, European Central Bank

Jelena Stapf of the Bundesbank gave an overview of the Bundesbank's study on the future of payments, in which experts imagined different scenarios that could take shape. All seem possible, depending on consumer demand, awareness of payment options and choice, and government intervention, but Stapf argued that we should not only think about ourselves in this debate, but also about people who are not able to participate digitally.

In the following panel discussion, Jelena Stapf, Kolja Gabriel of the Federal Association of Banks in Germany, BdB, Matthias Schroth from Austrian Nationalbank OeNB and Oliver Krist of the Federal Association “Bargeld zählt!” discussed what more should be done to increase the accessibility and availability of cash and to raise awareness in society.

• Schroth explained that the OeNB is clearly positioning itself as an active neutral central bank, i.e. actively supporting the wide availability and accessibility of cash. The OeNB recently decided to install ATMs in 100 rural communities in Austria.

• Krist emphasized the need of educating the public and market players about the role and importance of cash.

• Gabriel said that there are 51,000 ATMs in Germany - more than in other countries and averaging one ATM every 1.7 km, although he admitted that there are more in urban areas than in rural ones. As cost pressure on banks is high, he suggested that greater coverage could potentially be achieved through retailers.

Kirsten Bock of the German Data Protection Foundation presented facts and figures on the use of digital consumer data. “Did you know that 650,000 different types of consumers have been categorized based on their digital footprint as you can find publicly available on the web?”, she asked. She emphasized that decentralization of money (such as a wide distribution of cash among the population) would help increase privacy and security, while regulations to protect digital systems are fragile (as seen in the US).

When asked what could be done to raise awareness among the younger generation of the implications for security and privacy to recklessly share private data digitally, Bock reiterated comments by Krist and Stapf calling for adults to act as role models in this regard.

Stefan Hardt, Director General Cash at the Bundesbank, moderated the day’s final panel ("Chaos, disasters, crises: Can cash save us?"), which discussed crisis scenarios and how to increase the resilience of the critical cash infrastructure. Cash circulation increases during a crisis, as shown by the Bundesbank's joint study with the research economists Gerhard Rösl, Franz Seitz and Nikolaus Bartzsch, and it can be difficult to meet demand if the infrastructure is inadequate (as was the case in Lithuania). While isolated actions have been taken—for example, Schroth explained that OeNB in Austria has taken measures to increase the distribution network and has developed a concrete concept for the distribution of cash in a crisis with cross-sectoral crisis exercises in the country—more work is clearly needed across all EU countries.

Sissy Hajtmanek, after an excellent moderation throughout the symposium, closed the day with a call to all to assume their social responsibility to communicate more about the value of cash and its importance to society.