The Bank for International Settlements certifies the return of demand for cash after the pandemic

Madrid, March 7 (European Press) –

The Bank for International Settlements (BIS) has endorsed a recovery in demand for cash after the pandemic, despite advances in digital payments, according to an article published last January and compiled by Denaria.

In the study, titled “Digital Payment, but Always Cash,” the Bank for International Settlements notes that the decline in cash use during the pandemic “was reversed after the easing of restrictions” and ensures that individuals increase their cash holdings during the defined period of the Covid-19 crisis.

In this sense, the supervisor points out that reducing the number of automated teller machines (ATMs) has led citizens to increase the amount of money withdrawn at each withdrawal, and for this reason Dinaria considers that the disappearance of these machines “shows the restrictions imposed on citizens’ freedom to access their money.”

The Bank for International Settlements study includes data from the 27 countries that make up its committee, including Spain, and these are numbers collected in 2021 and cover until 2021, although they indicate that the trend of returning to cash continued in the past year.

cash volume

The volume of cash – notes and coins – in circulation relative to GDP exceeds the pre-pandemic level in most countries, although there are differences in the ratio between countries. For example, cash in circulation in Japan accounts for 23.5% of GDP and in the eurozone and Switzerland it is 12.8%, while in Sweden it barely exceeds 1%.

Although the conclusion is that cash remains, the article notes that the number and amount of cash withdrawals in 2021 decreased, although less than in 2020 and with significant differences between countries, according to Bank for International Settlements data. In half of the countries reporting the data, the number of withdrawals in 2021 decreased at a slower rate than in 2020, while in others it increased.

In terms of amount, cash withdrawals declined across all countries, although not as strongly as in the previous year. So, in general, the growth rate of cash withdrawals in 2021 was almost everywhere lower or similar to the pre-pandemic rate.

More amount per transaction

As for the average value of cash withdrawals in 2021, it was higher in Australia, Germany, the Netherlands, Switzerland, Sweden and the United Kingdom, compared to Argentina, India, Mexico and South Africa, according to the report’s data, which reflects the rise in per capita GDP in general in advanced economies.

The BIS data also reflects that in countries where the number of ATMs has decreased over the past decade, the average value of each money withdrawal has increased, and the opposite is observed in countries where the availability of ATMs has increased over time, BIS notes.

Thus, a decrease in the number of ATMs should lead consumers to withdraw cash less frequently, but in larger amounts, according to the Bank for International Settlements. To do this, it draws on experience in the Netherlands, with a correlation between a “strong decline” in ATMs and a “significant increase” in average withdrawal values, as well as a “strong decline” in cash withdrawals.