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Approaching 20 years of euro cash in Austria: What has changed, and what’s next?

Anton Schautzer () and Helmut Stix ()
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Anton Schautzer: Oesterreichische Nationalbank

Monetary Policy & the Economy, 2019, issue Q1-Q2/19, 99-112

Abstract: This article discusses how the use of cash has evolved in Austria since euro banknotes and coins were introduced in January 2002 and how the underlying production/logistics processes have changed. Regarding the role of cash in Austria, we show that Austria is among the more cash-intensive economies within the euro area. In general, euro cash has remained an important medium of exchange and store of value. Its overall circulation has increased, in particular after the global economic and financial crisis, both in the euro area as a whole and in Austria. In the context of a growing demand for cash, we discuss how technical progress in the production of euro banknotes and in euro cash logistics has contributed to cost-efficiency. As euro cash is the joint product of all Eurosystem national central banks, we also address the role of the OeNB in the supply of banknotes. Finally, we provide a brief discussion about the likely future of cash. Overall, there are three main messages that can be drawn from our brief contribution. First, euro cash is here to stay, although it is likely that its demand will decline in the coming years, mainly due to innovations in payment technologies and prospective increases in interest rates. Second, cash is not outdated given the technical developments in cash production and dissemination, the continued use of cash by consumers and the costs of cash vis-à-vis other payment means that merchants face. Third, there is a need for more research in order to better understand the demand for cash, in particular referring to those aspects that are unrelated to short-run payment needs.

Date: 2019
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