Banknotes and coins seem to be victims of marginalisation in Europe, especially in France where the use of cash is increasingly declining. This drop is mainly due to technological developments but also banks’ economic interests and new regulations imposed by governments to limit cash payments.
But cash appears to be vanishing from wallets. In France, it now represents only 15% of transactions’ total value – far less than in Germany, Italy and Greece but still more than in Sweden, where cash has almost been completely replaced. According to the economist Michel Aglietta, the complete digitalisation of paper money is the logical next step in human history.
However, not everybody supports this evolution. A study showed that about 33% of French people reported to be unable to do without cash. Specialists agree to say that money should not be only considered as a means of payment but also as a social phenomenon. For most people, especially the unbanked or vulnerable populations, cash represents trust and safety.
Indeed, a survey conducted by the ECB in 2011 demonstrated that cash leads to more savings: only one third of circulating banknotes are used for financial exchanges. Cash also illustrates freedom: it is instantly available, anonymous and not subject to any control from banking or state institutions. Nevertheless, it is also used within the black economy, tax evasion and even illicit activities, which explains why political and financial authorities are striving to introduce stricter regulations on its use.
The difference regarding the utilisation of cash observed between European countries might be related to the people’s confidence in their institutions. For instance, Weimar Republic’s hyperinflation led German people to lose confidence in their government, making them the “champions of cash use” in Europe.
Besides, we are witnessing a boom of local currencies since 1980, with more than 30 in France alone. As bitcoins or other unregulated digital currencies, they show people’s willingness to keep control over their money and to put distance between us and centralised authorities, especially banking and state institutions.
To read the original article, in French, click here.