Anyone who asks when the euro actually came along will often receive “2002” as their answer – but that is slightly off the mark. The euro has in fact existed since 1999. At first, however, it was only available as book money. That changed at the beginning of 2002, when all citizens were able to get their hands on the euro, and euro banknotes and coins replaced the former national currencies of Germany and 11 other European countries. People in Germany could then obtain euros instead of Deutsche Marks from the country’s ATMs. This official first issuance of euro cash saw the currency changeover enter its final stage. Since then, euro cash has become a fixture in the lives of people in Germany and, to date, another 18 European countries. To mark this anniversary, the Bundesbank has given interested members of the public various opportunities throughout 2022 to talk with the Bank and learn more about euro cash.

An anniversary for all

Euro cash has a permanent place in the lives of many people all over Germany. A 2020 study by the Bundesbank showed that cash was almost equally the most widely used means of payment in both rural and urban areas. This is also reflected by the Bundesbank: with its total of 31 branches spread throughout Germany, it ensures that enough cash is available everywhere at all times. From the outset, then, it was clear that the anniversary events should also take place in various locations.

The first featured a glass cube containing exhibits relating to the introduction of euro cash. Alongside genuine moneybags, a mattress stuffed with not quite so genuine banknotes and other items on display, visitors could also find information on the introduction of euro cash and the security features they could look for to identify genuine banknotes. Following stops in Frankfurt, Munich, Stuttgart and Saarbrucken, the glass cube was also displayed in Düsseldorf, Hanover, Hamburg, Leipzig and Berlin this year.

The series of “Forum Bundesbank” events run by the Bundesbank’s regional offices was also part of the anniversary. Audiences in Stuttgart, Leipzig and Düsseldorf got to enjoy the specialist expertise of Professor Johannes Beermann, the Bundesbank Executive Board member responsible for cash, and high-profile guests from each region as they discussed the past, present and future of cash. This gave members of the public the chance to address their questions not only directly to a member of the Bundesbank’s Executive Board but also to renowned economists and a former Finance Minister, among others.

The book “The euro at 20 – The future of our money”, edited by Professor Beermann for the Bundesbank, did not skimp on contributions by high-profile international authors either. Readers who are so inclined can immerse themselves in a topic as interesting as it is multifaceted, with sections covering everything from the history of money in Europe to the importance of central banks worldwide for supplying cash to the economy to the money of tomorrow from an economic, philosophical, sociological and psychological perspective.

“20 years of euro cash” anniversary ceremony

The final event was an anniversary ceremony hosted by the Bundesbank in Berlin at the beginning of November. At the heritage-listed Westhafen Event & Convention Center, participants were treated to a diverse and entertaining programme that was not afraid to present varied perspectives.

Professor Johannes Beermann’s introductory remarks, in which he highlighted the great popularity of cash in Germany, was followed by a keynote speech by author, journalist and activist Brett Scott. In his view, cash was not the metaphorical “horse cart” that has now been superseded, as certain interest groups would have it. Instead, he saw it as a guarantor for the preservation of a resilient and inclusive balance of forces in the payments market. Mr Scott thus regarded cash more as a “bicycle” provided by the government, and warned against the unwanted knock-on effects of a cashless society.

In the second keynote of the anniversary ceremony, Kenza Ait Si Abbou, a technology expert and bestselling author, turned to the question of where the digitalisation of money is heading. Looking briefly at the history of money, she concluded that the current coexistence of cash and cashless means of payment was a new phenomenon. Normally, one form of money would replace the other. However, the digitalisation of money also entails risks, said Ms Abbou: crime is increasingly shifting to the digital domain, and cybercrime and data breaches are two possible consequences. And just as traditional means of combating counterfeit cash go a long way to creating trust in the currency, institutions must find new methods to always be one step ahead when it comes to cashless instruments, too. Her conclusion was that both cash and cashless systems should be retained.

In the final keynote of the event, Professor Alexandra Niessen-Ruenzi from the University of Mannheim discussed gender-specific differences in the world of finance. It was clear that women tend to have less of a risk appetite than men when investing their money. A comparison with other countries showed, however, that both genders still had some basic catching up to do when it comes to financial literacy, although women more so.

There was a lively back and forth during a panel discussion lasting almost one hour which looked at where cash would be on its 30th anniversary. Stefan Hardt, head of the Bundesbank’s Directorate General Cash Management, was optimistic, saying that the Eurosystem, with its cash strategy, is clearly committed to keeping cash in existence and is already currently working on a possible third series of euro banknotes. In this regard, however, Mr Hardt brought up the current interpretation of the neutral role played by central banks: while some interest groups were actively opposing cash and private providers of payment instruments were forcefully promoting their products, central banks had to ask themselves whether their previous passivity was still justifiable. “Neutrality does not have to mean passivity,” Mr Hardt said. Against this backdrop, it was understandable that some members of the public have unwarranted fears that cash would be abolished.

Professor Marcel Fratzscher, President of the German Institute for Economic Research, agreed that cash was a very emotional topic in Germany. However, he would like people to look beyond cash and for there to be more options to simplify digital payments. In his opinion, we will end up with a trio of payment options in the near future: in addition to cash, the digital euro and other crypto tokens will also become fixed elements of the payments landscape.

Dr Jens Zimmermann, member of the Bundestag, expressed similar views, saying he would like to see more drive for innovation in the German payments market. He attributed the lack of such innovation so far to the fact that Germany already had two very good systems in place, cash and girocard, which meant that for too long new developments were considered unnecessary. The Eurosystem’s investigations into a possible digital euro were therefore to be welcomed. At the same time, though, he urged for a realistic view to be maintained: cash and other means of payment were misused in the shadow economy, and this had to be resolutely combated. In the end, however, it would as always be citizens who decided on the future range of payment instruments; their use of the individual means of payment would “mercilessly” determine their success or failure.

Ramona Pop, Executive Director of the Federation of German Consumer Organisations, advised caution, saying that not everything touted as “snazzy, new and amazing” actually was. On the other hand, she also welcomed the investigations into the digital euro and urged against leaving digital payment services up to the tech giants. Consumers depended on trustworthy and reliable payment solutions. As far as that goes, cash was ahead of the curve thanks to its many advantages: using banknotes and coins was quick and easy, they allowed people to participate in society, protected privacy and were still usable even in the event of power outages.

Looking ahead

At both the anniversary ceremony and the other events, guests agreed that looking into a crystal ball was always fraught with uncertainty, but there could be no prediction of a bleak outlook for cash. The exact trajectory of cash is yet to be revealed. But whatever that journey looks like, the Bundesbank will continue to actively monitor the coming developments and will work to ensure that citizens can keep using cash as a matter of course, just as they always have. In other words, this anniversary will certainly not have been the last.