Will cash disappear? Many Germans are worried that this is exactly what could happen with the introduction of the digital euro, which was accepted as a project by the European Central Bank (ECB) back in July 2021. "Cash will remain!", Burkhard Balz from the board of directors of the German Bundesbank told the public broadcaster ARD. In this regard, he recalls the recent power outages in Spain, when ATMs and credit card payment devices in stores did not work and computers could not process payments.
Last but not least, this example from Spain clearly shows that in the event of accidents, natural disasters or sabotage, cash is the only means of making necessary transactions.
Cash is a cultural asset
Apart from emergencies, cash payments are necessary in everyday life - for example when selling your old car, says Philipp Wendt, director of the Consumer Agency in the German state of Hesse. In such transactions, cash is the safest means of payment, since the buyer and seller usually do not know each other.
But he goes even further: Wendt considers cash to be a cultural asset that must be preserved. Only with cash can children learn what money is and how to handle it. "We must ensure that cash does not become a thing of the past", Wendt urges in this regard.
The price of money
The German Bundesbank and the European Central Bank are responsible for issuing, controlling and maintaining money in Germany. And they make a lot of efforts to ensure that there is enough cash. And in recent years, demand has increased - mainly due to various crises, as is clear from an ECB report. Researchers have found that the demand for cash was particularly strong during the global financial crisis of 2008, the Greek debt crisis, the Covid pandemic and since the start of the war in Ukraine.
The digital euro – still only in theory
When the digital euro becomes a reality one day, individuals will be able to fill a so-called wallet on their smartphone with digital money, and payments will be made directly from the phone. These private wallets will have a limit of 3,000 euros for payments. And unlike the purely fictitious and unregulated bitcoins, the digital euro will be guaranteed by central banks.
And when will the digital euro be introduced? "We would be happy to launch in 2028", says Burkhard Balz from the board of the German Bundesbank.
The European Central Bank recently published a study entitled "Stay calm and keep your cash", in which the role of banknotes and coins in times of crisis is examined in more detail. "The results show that the unique characteristics of cash - that it is tangible, sustainable, not dependent on the internet and widely distributed - are crucial in crisis situations."
Author: Ingo Natusius (ARD)