Euro Vision (But Not the Song Contest)

Doris Schneeberger, Head of the Currency Management Division at the European Central Bank (ECB), spoke at December’s RBR conference giving the Eurosystem perspective on trends and developments in the use of cash.

Her talk covered the rise in value and volume of euro banknotes over the last few years, and 2020 in particular. Her view was that, initially, the rise in demand for notes was driven by the banking system ensuring they had sufficient notes in stock, but that public demand then kicked in with people wanting to hold cash ‘just in case’. The €50 was the most popular note.

Cash in circulation continues to rise even now with issues still exceeding deposits. The ECB ‘expects the normalisation of banknote demand in the medium term.’ The presentation went on to look at the 2019 Study on Payment Attitudes of Consumers in the Euro Space and the July 2020 study of the impact of the pandemic on cash usage (both of which were covered in December edition of Cash & Payment News™).

It finished with a look at the 2030 strategy and the ECBs five strategic objectives:

• Eurosystem ensures the issuance of cash.

• Eurosystem supports access to cash services (withdrawals and deposits).

• Eurosystem defines acceptance of cash as essential for the freedom of choice how to pay.

• Eurosystem ensures innovative and secure euro banknotes.

• Eurosystem ensures the health and safety of banknotes and endeavours to reduce the ecological footprint of cash.

The implementation measures needed to achieve these objectives were reviewed. The ECB will study whether the geographical coverage of the ATM network and bank branches is sufficient. Its national central banks (NCBs) will monitor fee policies for basic cash services. The ECB sees ‘cashback’ as welcome but not as a replacement for ATMs and branches.

For cash to remain as an effective contingency payment instrument, co-operation with stakeholders will be necessary. This is part of an awareness that the ECB needs to work more closely with the intermediaries in the cash distribution system.

The ECB will also look at whether it is possible to have offline transactions via cards in an ‘emergency mode’.

In the light of the opinion recently handed down by the Advocate General of the European Court of Justice, and the ruling expected on 26 January, the ECB will work with the European Commission to clarify and promote the legal tender status of euro cash. The Euro Legal Tender Group will meet to take stock of the latest developments regarding the availability and acceptance of euro cash.

The ECB will also discuss the legal tender status of euro cash with the stakeholder of the European Retail Payment Board.