The Eurosystem cash strategy

Euro banknotes and coins are the only legal tender in the euro area, and cash is the only form of public money that is directly accessible to all citizens, thereby ensuring autonomy, privacy and social inclusion. The ECB and the national central banks – also known as the Eurosystem – have a fundamental responsibility to ensure the smooth supply of cash and facilitate the use of cash in payments by citizens and businesses.

Banknotes are part of our economy, our identity and our culture – and we at the ECB have an immense responsibility to ensure that people maintain their trust in them.

Christine Lagarde, President of the ECB

We ensure the availability of euro cash

The Eurosystem ensures that euro banknotes and coins are available to the public at all times. All national central banks offer free-of-charge cash services throughout their countries, while working to make the cash cycle as cost efficient as possible. We also consider the needs of international markets since a large share of euro banknotes circulate outside the euro area. Even if a digital euro were to be issued in future, it would exist alongside cash.

We support access to cash services for everyone

The Eurosystem wants citizens and businesses to have access to their own money, whatever their preferences and payment needs. Credit institutions therefore have a social responsibility to provide cash services to citizens and businesses, including cash withdrawals that are free or incur only a reasonable fee. We also support retailers providing complementary cash services such as “cash back” or facilitating limited cash withdrawals and deposits. Finally, we support the banking sector in dealing with sudden surges in demand for banknotes and make sure that cash can function as a fall-back payment instrument in case electronic payments are temporarily unavailable.

We make sure that cash is accepted everywhere

Cash is still the main way people make retail payments in the euro area and the Eurosystem considers the universal acceptance of cash to be a vital part of the payment system and the legal tender status of euro cash; it ensures that consumers are free to choose how to pay. The acceptance of cash also means that people who do not have access to electronic payment services are not disadvantaged. Public service providers, traders and other businesses cannot refuse cash payments, unless explicitly required by law or where all parties have previously agreed on other means of payment.

We develop innovative and secure euro banknotes

The Eurosystem develops secure banknotes that are protected by the latest and most effective technologies to make them highly resistant to counterfeiting and easy to authenticate. We ensure the authenticity and high quality of euro banknotes in circulation and enforce strict standards for the checking and authentication of banknotes by banks and professional cash handlers. The European Commission’s PERICLES programme is also encouraging the development of security features for potential future upgrades of the current euro coin denominations. Last but not least, we ensure that the design of euro banknotes is one that Europeans can identify with.

We keep banknotes safe and sustainable

The Eurosystem makes sure that banknotes are safe to use by researching the potential impact of euro banknote production and circulation on public health and carrying out scientific examination and testing. We also look at the environmental footprint of banknotes to identify opportunities to reduce their environmental impact via new products and processes. This ensures that euro banknotes and their production processes become as sustainable, green and environmentally friendly as possible.

The role of cash

The economy requires a certain amount of available cash to function. Cash is the dominant means of payment within the euro area, as the clear majority of our daily payments are made using banknotes or coins. Cash is also essential for the inclusion of socially vulnerable citizens, such as the elderly or lower-income groups.

But cash offers other important functions and benefits:

  • It ensures your freedom and autonomy. Banknotes and coins are the only form of money that people can keep without involving a third party. You don’t need access to equipment, the internet or electricity to pay with cash, meaning it can be used when the power is down or if you lose your card.
  • It’s legal tender. Creditors, such as shops and restaurants, cannot refuse cash, unless both they and the customer have agreed on another means of payment in advance. For more information see the European Commission recommendation of 22 March 2010 (2010/191/EU).
  • It ensures your privacy. Cash transactions respect our fundamental right to have our privacy, data and identity protected in financial matters.
  • It’s inclusive. Cash provides payment and savings options for people with limited or no access to digital money, making it crucial for the inclusion of socially vulnerable citizens such as the elderly or lower-income groups.
  • It helps you keep track of your expenses. Cash allows you to keep closer control of your spending, for example by preventing you from overspending.
  • It’s fast. Banknotes and coins settle a payment instantly.
  • It’s secure. Cash has proven to be secure in terms of cybercrime, fraud and counterfeiting. And, as it’s central bank money, it doesn’t entail financial risks for either the payer or the payee.
  • It’s a store of value. Cash is more than just a payment instrument. It allows people to hold money for saving purposes without default risk. It is useful for small person-to-person gifts and payments. For example, parents can entrust small amounts of cash to their children for small purchases, or a person can give a friend or acquaintance cash to purchase something on their behalf. Cash also contributes to the financial literacy of children.