Thread by @EoghanOBrien9

Really interesting piece by the ECB on why despite the shift to electronic transactions, demand for physical bank notes continues to grow! #CashIsKing #CentralBanking
ecb.europa.eu/pub/economic-b…

Stats from the Federal reserve also show a significant uptick in USD banknotes in circulation since the onset of the pandemic.

The ECB estimates that ~20% of banknotes are held for transactional purposes. While cash held in vaults by banks has increased somewhat since the introduction on negative rates, this only partially accounts for the rise in demand for banknotes.

Demand for cash as a store of value (pronounced in times of uncertainty), demand outside the euro area for euro banknotes (demand for strong currency in countries with historically high inflation), and aging populations are some of the reasons for the continued growth of cash 💸