The future of cash in Europe
Cash in the euro area is used less often at the checkout, while the amount in circulation keeps growing. More than 31 billion euro banknotes worth over 1.6 trillion euros are in circulation, according to the ECB. Central banks and EU lawmakers now decide how cash stays usable next to digital payments. Dated events on payments are in the calendar below.
What the Eurosystem is doing
The ECB is redesigning the euro banknotes. President Christine Lagarde launched the project in December 2021, the Governing Council chose the themes "European culture" and "Rivers and birds" in November 2023, and ten designs went to a public survey that more than nine million people answered. The final decision is expected around the end of 2026, and the new notes will enter circulation gradually over the following decade.
The ECB also holds a strategic contingency stock of banknotes for sudden jumps in demand, as during the pandemic. In the same speech Piero Cipollone said that people in the euro area should be able to pay with cash whenever they choose, and that the Eurosystem works with banks so that everyone can get and use cash.
Germany: three scenarios for 2037
In Germany cash is still the most used means of payment by number of transactions, at 45 percent in the Bundesbank payment study. The Bundesbank has also modeled the future (in German) in three scenarios for 2037: a hyper-digital payment world in which cash has almost disappeared from daily life, a renaissance in which its use stabilizes, and a hybrid world in which access keeps getting worse. The Bundesbank stresses that these are not forecasts.
A large share of German cash is not used for payments at all. Jens Weidmann, then Bundesbank president, said in a speech at the cash symposium that about five percent of the banknotes the Bundesbank issued were used for payments, around 40 percent were held as a store of value and the rest went abroad.
The law: legal tender and access to cash
The single currency package the Commission proposed in June 2023 has two main parts: a digital euro regulation and a regulation on the legal tender of euro banknotes and coins. The second writes down that shops must accept cash, with narrow exceptions, and asks member states to monitor access to cash. The European Parliament's negotiating position adds that businesses would not be allowed to ban cash. Legal tender of the euro covers the rules.
From July 2027 the EU anti-money laundering regulation caps cash payments to traders at 10,000 euros, and member states may set lower limits. Access is the other pressure point: in the Bundesbank study 29 percent said reaching an ATM had become harder within two years, and central banks ask the banking industry to keep cash within reach.
Upcoming payments events in Germany
Will cash be abolished in the euro area?
No such plan exists. The ECB is designing new banknotes, and the legal tender regulation under negotiation would make the acceptance of cash a binding rule. The digital euro is planned as a complement to cash.
When will the new euro banknotes come out?
The ECB expects to choose the final designs around the end of 2026. Producing the new series takes several years, and the notes will enter circulation gradually over the following decade.
Is there a limit on cash payments in the EU?
Yes, from July 2027. The anti-money laundering regulation limits cash payments to traders for goods or services to 10,000 euros. Several member states already apply lower limits.
The future of cash and Finance Loop
Finance Loop covers cash next to the digital euro and stablecoins in its Payments & Digital Money track, because banks plan their cash and digital payment services together. Finance Loop is a strategic partner of the Digital Euro Association, whose conference in Frankfurt discusses public money in both forms.
Finance Loop is a professional network and has the goal of driving the adoption of emerging technologies in finance, such as AI, digital payments, cloud and blockchain solutions. Finance Loop helps its members build skills and personal networks in these fields: Investment & Digital Assets, Payments & Digital Money, Digital Infrastructure & Sovereignty, and Risk & Compliance.