Anxiety over war, wildfires and cyber-attacks leads to growth in cash stocks in EU

The number of banknotes circulating in the European Union has reached record levels, driven by growing concerns over geopolitical tensions, environmental disasters and cybersecurity threats, according to newly released data. The trend reflects a shift in public behavior, even as digital payment methods continue to dominate everyday transactions. This surge in physical currency comes amid heightened anxieties over ongoing conflicts, devastating wildfires and the vulnerability of online payment systems to cyber-attacks. The European Central Bank's chief economist, Philip Lane, noted during a speech at the MacGill summer school conference in Ireland that while the volume of cash used in daily transactions has declined, the overall stock of banknotes in circulation continues to rise. Data from the ECB, which has tracked the number of banknotes in circulation since 2002, reveals that their total value increased from approximately €1 trillion in 2016 to €1.6 trillion by June 2026. More than 31 billion notes are currently in use, compared to 24 billion just before the onset of the pandemic in 2019. The €50 note remains the most commonly held denomination, followed by the €100 note. Experts suggest that the uptick in cash holdings is largely attributed to fears surrounding global instability. Recent cyber-attacks, such as the prolonged disruption of online ordering systems at Marks & Spencer in the UK, have raised awareness about the risks associated with reliance on digital infrastructure. In addition, the severe wildfires that swept through parts of France and Spain earlier this year prompted authorities to advise EU residents to prepare for potential emergencies by stocking up on essential supplies, including cash. A government directive issued in 2025 urged households to maintain a minimum of €70 to €100 in cash per household, sufficient to cover basic needs for 72 hours in the event of system failures or other crises. Several European nations, including Austria, Finland, Germany, Sweden and the Netherlands, have echoed these recommendations, emphasizing the importance of maintaining access to cash for vulnerable populations. Olive McCarthy, a professor at University College Cork specializing in financial inclusion, highlighted the role of cash as both a practical necessity and a social safeguard. She stressed that cash remains crucial for individuals who rely on it due to limited access to digital tools, such as the elderly, people experiencing domestic abuse and others facing financial exclusion. McCarthy also pointed out that the continued use of cash can play a key role in educating younger generations about money management and budgeting. She warned against viewing cash solely as a contingency option, arguing that its decline could lead to difficulties in accessing it during actual emergencies. “If we stop using it when there isn’t a crisis, it might not be easy to use it when there is,” she cautioned. The ECB has acknowledged the dual nature of cash usage, noting that while its role in routine transactions has diminished, its significance in times of crisis remains undiminished. The institution has called for legislative measures to ensure that ATMs and cash services remain accessible on every high street across the EU. Lane emphasized that some consumers still prioritize the privacy and convenience of cash, especially in situations where digital systems fail or security is compromised. He also noted the broader societal implications of cash, particularly in ensuring inclusivity and resilience in times of uncertainty.