Bundesbank
Weidmann: The digital euro would not be a substitute for cash
Despite a trend towards cashless payments, the demand for banknotes in Germany remains high. Photo: Patrick Pleul / dpa-Zentralbild / dpa
© dpa-infocom GmbH
The Germans are considered to be the people who pay cash. In the pandemic, however, paying without notes and coins has gained momentum. A goodbye to cash is not likely to be in the offing.
Despite a trend towards cashless payments, the demand for banknotes in Germany remains high. “For the current year, a net issue is emerging that is lower than in the previous year, but slightly exceeds the value of 2019,” said Bundesbank President Jens Weidmann on Wednesday according to the speech at the opening of a symposium of the Bundesbank in Berlin was broadcast live on the internet.
“So the demand for cash continues to grow, although its importance as a means of payment has declined. Its function as a store of value explains this paradox, ”Weidmann explained. In 2020, the Bundesbank issued euro banknotes with a total net value of 70 billion euros through its branches.
60 percent of everyday transactions that are made in Germany are still paid for with bills and coins. However, the corona pandemic has given non-cash payments a boost. For reasons of hygiene, retailers are promoting contactless payment at the checkout, and online trading is booming.
It is convinced that “cash will also play an important role in the foreseeable future,” affirmed Weidmann. «No other means of payment will be able to replicate all of its properties. Not even the digital euro. “
Europe’s monetary authorities have been looking into the possible introduction of a digital variant of the European common currency for a while now. In mid-July 2021, the European Central Bank (ECB) decided to take the preparatory work to the next level: In a two-year investigation phase, it is now about technology and data protection. It has not yet been decided whether a digital euro will come.
“One thing is clear: the digital euro will not be able to offer the anonymity of cash. After all, digital payments always leave traces, ”said Weidmann. «In view of the risks in particular, it might make sense to proceed gradually with the digital euro. That means, first of all, equipping the digital euro with a certain bundle of properties that allow important uses as a means of payment. More functions could be added later. “