Cash is a contingency and fall-back solution

While Sudan will require food aid in the short term, the bulk of the response is likely to involve cash transfers. But in what form?

In Sweden, an inquiry concludes that the state should ensure better access to payments, recommends mandating cash acceptance, and sees no current need for a digital krona.

The Austrian National Bank (OeNB) advises storing a small amount of cash at home for emergencies – such as a blackout or cyberattack.

Crises such as the Covid-19 pandemic and the Russian invasion of Ukraine demonstrate the importance of a resilient cash cycle. Several countries are taking measures to further secure the supply of cash in times of crisis.

Digital payments dominate retail transactions in Sweden, but cash usage has not declined to irrelevance.

Several Colombian banks experienced system outages in December, generating customer malaise and evidencing the vulnerability of digital payment infrastructures.

A massive winter storm caused widespread power outages across the United States. Cash demonstrated its resilience during the blizzard in the worst-affected Buffalo area.

The Department of Finance Retail Banking Review highlights the increasing pressure on the cash infrastructure due to closing of bank branches and ATMs. It recommends a legislative framework to ensure reasonable access to cash.

After record growth in 2020, global demand for banknotes has returned to a normal situation. More recently, rising inflation and increasing interest rates have been negatively impacting cash balances. More concerning is the decreasing transactional use of cash, which puts pressure on the cash infrastructure. The cash community should make the case that cash is part of a critical public infrastructure, the maintenance and development of which should be financed accordingly.

In 2019, only around 15% of the value of cash in circulation was used for domestic transactions in France, while 25% was held for precautionary motives. Over half was held outside France, primarily outside of the euro area.

In 2021, global cash demand returned to a normal pre-covid distribution, which is quite remarkable after the exceptional growth in 2020. Looking forward, demand will be influenced negatively by rising interest rates and positively by geopolitical tensions. More than ever, a well-functioning cash infrastructure is essential to meet volatile demand.

To strengthen and safeguard the role of cash by facilitating open dialogue, the Austrian Central Bank has launched the Euro Cash 360° Platform, along with the Austrian Mint, social partners and other interest groups.