These banknotes that individuals keep under their mattresses

Despite its role in monetary creation, certain paradoxes still escape the European Central Bank. On the one hand, the use of cash in everyday transactions continues to decline (-6% from 2016 to 2019) in favor of other means of payment (mainly card and contactless). On the other hand, the number of banknotes in circulation has never been higher. The year 2020 saw an increase of 11% in one year of euro banknotes in the world to 1.435 billion euros, against 1.293 billion in 2019. Over the past ten years, the average increase was 5%.

In an attempt to unravel this enigma, the institution has traced the track of cash in a study published on Monday. It first notes that while cash is on the decline, it remains the main means of payment used in the euro area with, in 2019, an amount of transactions of 1.993 billion euros for 117 billion transactions. This corresponds to 72% of point-of-sale payments. But this explanation is not sufficient since in reality, these transactions are only carried out with around 20% of the amount of banknotes in circulation, or around 260 billion euros.

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