dw.com
Eurozone Cash Paradox: Rising Cash Despite Digital Payments
Despite the increasing use of digital payments in the Eurozone, the volume of physical cash in circulation reached €1.564 trillion in March 2025, a €300 billion increase since the start of the pandemic, raising concerns about potential illicit activities.
- What are the potential long-term implications of this cash paradox, particularly concerning the shadow economy?
- The significant amount of cash held outside the formal financial system presents risks. It could potentially facilitate money laundering, tax evasion, and other illegal activities, undermining the formal economy and government revenue. Further investigation is needed to determine the true extent of these activities.
- What is the main finding regarding cash in circulation in the Eurozone, and what are its immediate implications?
- In March 2025, the Eurozone held €1.564 trillion in physical cash, a significant increase compared to previous years. This increase, despite growing digital payment adoption, is labeled the "cash paradox" and points towards a substantial amount of cash held outside the formal economy.
- What factors contribute to the rising amount of physical cash in circulation, even with increased digital payment usage?
- The increase in physical cash is attributed to several factors, including increased savings due to economic uncertainty (e.g., wars, crises) and a preference for cash as a secure payment method. However, the rising amount also suggests a potential increase in unreported economic activities.
Cognitive Concepts
Framing Bias
The article presents a balanced overview of the increase in cash holdings in the Eurozone, acknowledging both the potential benefits (savings, security during crises) and drawbacks (facilitation of illegal activities). The framing avoids overly alarmist or celebratory tones. However, the headline, if any, could influence perception by emphasizing either the 'paradox' or the potential risks.
Language Bias
The language used is largely neutral and descriptive. Terms like "paradox" are used objectively to describe an observed phenomenon, rather than to express a judgment. There's no clear use of loaded language or emotional appeals.
Bias by Omission
While the article discusses the increase in cash and potential explanations, it could benefit from including diverse perspectives beyond financial experts. For instance, views from economists on the broader macroeconomic implications of this trend or sociological perspectives on consumer behavior would add depth. The article also omits details on specific government policies that might influence cash usage. Due to the length, such omissions are understandable.
Sustainable Development Goals
The article highlights a paradox where cash in circulation is increasing despite the rise of electronic payments. This disparity suggests that a significant portion of the population may be holding onto cash reserves, potentially exacerbating existing inequalities. Those with access to and trust in financial institutions are more likely to utilize electronic means, while those without this access or with concerns about financial instability may resort to holding cash. This difference in access and behavior creates or widens the gap between the rich and poor.