Just like any crisis, the coronavirus outbreak caused substantial growth in demand for banknotes. Recent months have witnessed a surge in the amount of cash circulating in the euro area, with millions of consumers increasing their spending as they tried to stockpile goods ahead of coronavirus lockdown.
According to data gathered by Buy Shares, the cash demand in Europe jumped by €50bn in the last five months, growing from €1.29trn at the beginning of January to €1.34trn in the first week of May.
Value of Euros in Circulation Jumped by €20bn in March Only
In the first week of 2010, the value of euro banknotes in circulation amounted to €800bn, revealed Statista and European Central Bank data. By the beginning of 2015, this figure jumped over €1trn value for the first time. The increasing trend continued in the following years, with the total amount of euro banknotes in circulation growing to €1.28trn in the last week of 2019.
However, with millions of Europeans ramping up spending ahead of lockdown measures, the first quarter of 2020 has witnessed the biggest surge in the amount of cash circulating in the euro area since the 2008 financial crisis.
Statistics show that in the week from March 16 to March 22, the value of euro banknotes that enter circulation increased by €20bn, the high point of a build-up that started in the last week of February. Cash demand was not as high in April, showing fluctuations between €4bn and €8bn per week.
By the end of the first week in May, the combined value of euros in circulation reached €1.33trn, a €540bn increase in the last decade.
Nordic Countries and the United Kingdom the Least Likely to Use Cash
Statista data also revealed considerable differences in the use of cash among European countries. Statistics show Albanian consumers are most likely to use cash, with 89.8% share in total POS payment transactions. Serbia and Greece follow with 81.3% and 77.6% share, respectively.
According to the survey, consumers from the United Kingdom and the five Nordics countries were least likely to use cash. The use of banknotes among Britons dropped from 30.7% in 2010 to 15.7% in 2018, transforming the country into a cashless society.
Statistics show Finnish consumers chose cash for only 19.1% of their daily transactions. Denmark, Norway, Sweden, and Iceland follow with 13.4%, 12.3%, 10.5%, and 8.4% share, respectively.