The Banque de France and the Eurosystem are guarantors of public confidence in the euro. They ensure the smooth, uninterrupted supply of cash and facilitate its use by both individuals and businesses as a means of payment. They also ensure that cash remains a secure means of payment, easily accessible to all those who wish to use it, and accepted at all points of sale. The Eurosystem maintains this confidence by developing banknotes that are protected by the latest and most effective technologies, making them highly resistant to counterfeiting and easy to authenticate. To this end, the Banque de France carries out checks on all those involved in the cash industry, particularly those who put banknotes back into circulation.
The Banque de France must ensure the neutrality of currency. It does not seek to favour one means of payment over another or to influence the behaviour and preferences of the public, so that everyone has the freedom to choose how they wish to pay.
In 2022, half of point-of-sale transactions in France (and 57% in the euro area) were settled in cash (banknotes and coins), which remains the preferred means of payment
95% of businesses in France accept cash, and 99% of them intend to continue accepting it in the years to come
The use of cash in transactions is declining in favour of electronic means of payment due to technological innovations and also the Covid-19 pandemic. However, the decline in the use of cash in transactions must be put into perspective: banknotes are still the dominant method of payment in face-to-face transactions, especially for small-value purchases, as recent studies carried out by the Eurosystem show. Banknotes and coins are still the most frequently used means of payment in Europe and in France.
In 2022, a survey conducted by the European Central Bank (ECB) sought to shed light on businesses’ and professionals’ current and future behaviour and perception with regards to cash compared with other means of payment. The survey found that 95% of businesses in France accept cash, of which 99% intended to continue to do so in the years to come.
In France, net banknote issuance reached €198 billion in December 2022, up 7.5% year-on-year. The total value of banknotes and coins in circulation was €1,556 billion
Around 20% of euro banknotes in circulation in value terms are used in transactions, while the remaining 80% are split between cash held outside the euro area and cash hoarded within the euro area
The Banque de France takes into account the high level of demand for cash, which is driven by hoarding and foreign demand. While payments in cash are declining, net demand for banknotes remains structurally positive.
According to European Central Bank (ECB) estimates, between 30% and 50% of euro banknotes (in value terms) are held outside the euro area. The circulation of the euro beyond its borders essentially corresponds to net transfers of banknotes outside the euro area by major international banks operating on the currency market. It does not take into account other channels of net banknote outflows, such as tourism, transfers of funds by migrant workers, or the grey economy.
In its most recent work, the ECB estimates that transactional use of euro banknotes accounts for around 20% of their circulation in value terms, with the remaining 80% split broadly evenly (40-40, plus or minus 10 percentage points) between cash held outside the euro area and cash hoarded within the euro area.
In France, the National Cash Management Policy (NCMP) addresses the numerous challenges posed by changes in the cash industry in recent years. It was drawn up in 2019 in conjunction with all the industry stakeholders. This policy defines five pillars of measurable objectives shared by all those involved in the industry.