According to data from the European Central Bank, in March 2025, there were 1.564 trillion euros in cash in the eurozone countries. This is almost 30 billion more than in the spring of 2022, and 300 billion more than at the beginning of the pandemic five years earlier. Although electronic payments in the eurozone are becoming more widespread, the volume of cash in hand is growing instead of decreasing. The Federal Bank calls this the "banknote paradox" and notes that this situation has been observed for years in many countries. Financial analysts suggest that there are hundreds of billions of euros that are not being spent, but are hiding "under the mattresses".
According to the Federal Bank, in Germany at the end of 2024 there were 395 billion euros in private households. The share of banknotes that Germans hold as savings was about 42 percent - more than twice as much as in 2013. But these funds are not distributed evenly - many households have no or minimal cash reserves at all.
"The cash paradox"
The paradox is that although fewer and fewer people pay in cash, the volume of cash in circulation is constantly growing. According to the Federal Bank, in 2023 half of all payment transactions at cash registers in Germany continued to be carried out in cash. But this is only a quarter of the total turnover. A recent study conducted in nine European countries and Turkey shows that the debit card is increasingly becoming the standard for payments - 40 percent of respondents prefer it. 22 percent use credit cards, and 14 percent - payment apps. Only 23 percent of Europeans continue to pay exclusively in cash.
In Germany, the popularity of banknotes and coins has been declining since 2022 - if 50 percent paid in cash then, they are now around 35 percent. But compared to the European average, Germans continue to pay more in cash.
Where are the billions
But why is there more cash in circulation, even though fewer people use it in their everyday lives? "The euro is being actively saved", believes financial expert Ralf Wintergerst. He adds that the euro is used primarily for payments, but also for accumulating savings. The expert points out that uncertainty is a major factor. Observations by banking analysts indicate that an increase in money in circulation in times of crisis is a common phenomenon. "If a war starts, there is a crisis or a flood occurs, you need to maintain your ability to pay. Cash is a safe bet," says Wintergerst.
At the same time, experts note that the increase in cash among citizens - in addition to savings - can contribute to the emergence of a shadow economy. This includes money laundering, paying for services and goods without paying taxes, as well as activities that go beyond the law.
Author: Elena Dozhina