Cash is the most widely used payment instrument

Global banknote demand is rebounding post-pandemic, returning to pre-2020 trends. The introduction of new high-denomination notes has slowed, yet cash remains vital as a store of value. Cash infrastructure must adapt to declining transactional use and rising precautionary demand.

From the US phasing out the penny to Germany’s push for cash payment rounding, the relationship between coins and banknotes is transforming—but coins are far from obsolete. While banknotes grow as a store of value, coins continue to play a vital role in everyday transactions, supported by smart denominational strategies and durable innovations. Explore how central banks are adapting currency structures, balancing tradition with efficiency, and ensuring coins remain essential in the diverse ecosystem of cash.

Despite predictions of a cashless society, cash remains vital across all age groups. New ECB research reveals older adults prefer cash for transactions, but young adults pay with cash at roughly the average rate and keep cash reserves. The perceived importance of cash is rising for all!

Reducing child marriage is part of the United Nations Sustainable Development Goals. Giving cash to low-income families in Indonesia cut child marriage rates among rural girls by 3.5 points. A major government program shows poverty reduction policies can have powerful ripple effects beyond just income.

Elsewhere on the Web provides updates and links to articles related to cash, money and payments curated on the web. This month the focus is on declining cash usage for payments and the growing threats that this poses to the economy and society.

2024 marked a pivotal chapter in the evolving narrative of cash. From New Zealand’s innovative community cash trials to Germany’s National Cash Forum, efforts were made to enhance access and acceptance of cash. Research delved into its psychological and societal importance, while the Paris Olympics exposed the challenges of cashless society. This retrospective captures key moments that shaped the discourse on relevance of cash, reflecting its enduring role in fostering financial inclusion, economic stability, privacy and consumer choice.

The European Central Bank (ECB) published in December its latest study on the payment attitudes of consumers in the euro area (SPACE). In terms of the number of payments, cash is the most widely used method with 52% of transactions, down from 59% in 2022.

The Royal Canadian Mint’s supply of coins has increased after the Covid-19 pandemic. Canadian retailers remain committed to accepting cash transactions.

Cash prevails in the Palestinian economy in the form of Israeli shekels. Cross-border payments are unstable. Cash transfers will have a limited impact without humanitarian supplies to help displaced Gazans.

Cash is the most widely used and accepted payment instrument in Spain, according to a recent survey from the Banco de España. Very few people and retailers know about the digital euro.

Cash in circulation in Russia has expanded dramatically since the Ukraine invasion. In June 2023, the demand for rubles and foreign cash spiked as Wagner forces approached Moscow.

Cash remains the most used payment instrument in France. It has become even more popular, despite the proliferation of digital payments.