For decades, analysts predicted the slow death of cash as digital payments, online banking, and cryptocurrencies took hold. Yet, despite these forecasts—and policy efforts to reduce cash use—physical money remains alive and well in Europe.
Greece as a Case Study
In Greece, the COVID-19 pandemic accelerated the adoption of electronic payments, even among older generations. Online shopping surged, while government measures encouraged digital transactions as part of a broader campaign against tax evasion. New rules, including a requirement for rent payments to be made electronically starting in January 2026, underline this shift.
These efforts have boosted government revenue: increased digital transactions and stricter monitoring have created fiscal space for €600 million in tax relief this year and €1 billion more expected in 2026. Still, attempts to further restrict cash usage have faced resistance from European regulators.
The European Central Bank’s Position
The European Central Bank (ECB) has consistently defended the role of cash, emphasizing its importance for transaction anonymity, inclusion of people less familiar with technology, and as a backup when digital systems fail.
According to ECB data, the value of euro banknotes in circulation reached €1.59 trillion at the end of 2024, equal to about 10% of the eurozone’s GDP—a share similar to a decade ago. Although only about 20% of this cash is used in everyday payments, the rest is held as savings, reflecting its enduring role as a store of value.
Even in physical retail, cash use remains dominant. In 2024, cash was used in nearly half of all in-person transactions, making it the most widely accepted and frequently used payment method across Europe.
Why People Still Rely on Cash
Several factors explain why predictions about cash’s decline have proven wrong:
- Limited substitution: Digital payments cannot fully replicate the benefits of cash.
- Habit and cost: Changing payment behaviors involves time and effort.
- Demographic diversity: Many groups, from older citizens to younger adults, continue to rely on cash.
Interestingly, surveys show that younger Europeans (ages 18–27) increasingly keep cash on hand as a precaution, suggesting that its appeal spans generations.
Trust, Privacy, and Security
Public concerns about cybersecurity and digital vulnerabilities also support the continued use of cash. Issues such as data misuse, privacy risks from digital transaction records, and online fraud have reinforced trust in physical money.
Moreover, recent crises—including the pandemic, Russia’s invasion of Ukraine, and power outages disrupting electronic systems—have highlighted cash’s resilience as a reliable fallback.
As Europe moves toward the digital euro, policymakers face a delicate balance: promoting secure, efficient digital systems while maintaining access to physical money. For now, cash remains not just relevant, but essential—both as a payment method and a symbol of financial stability.
