Non-final working translation

The Bundesbank regularly reports on demand for euro cash. Cash holdings grew for many years despite the use of cash for payments falling significantly. This is referred to as the “paradox of banknotes”. Since 2022, however, demand for euro cash has exhibited strikingly weak growth. By contrast, the value of cash issued by the Bundesbank has continued to increase – albeit at a much slower pace than before. This article examines the reasons behind these developments and presents new estimates of the use of euro coins issued in Germany.

At the end of 2025, the value of banknotes issued by the Eurosystem (banknotes in circulation) stood at €1,619 billion. Following the sharp rise during the coronavirus pandemic, growth came to a halt when the ECB set the interest rate reversal in motion in summer 2022. Since then, the value of banknotes in circulation issued by the Eurosystem excluding the Bundesbank has been declining. Banknotes brought into circulation by the Bundesbank stood at €990 billion (61 % of the value issued by the Eurosystem) at the end of 2025. This figure has been rising again since the beginning of 2023, albeit to a lesser extent than before the coronavirus crisis.

It is estimated that at the end of the fourth quarter of 2025, 46 % of the value of banknotes issued by the Bundesbank was located abroad (€459 billion) – around €273 billion of which outside the euro area. Banknotes worth around €531 billion were held domestically, of which an estimated €496 billion were used for store-of-value purposes. Until 2014, the value of banknotes in circulation was mainly driven by foreign demand. Since then, dynamics have increasingly been supported by domestic demand as a store of value due to low interest rates. During the coronavirus pandemic, the value of euro banknotes in circulation issued by the Bundesbank rose sharply, as many people hoarded cash as a store of value, and consumption opportunities were limited by the lockdowns. The interest rate reversal marked the end of this rise, as higher interest rates made cash less attractive. As a result, credit institutions significantly reduced their cash holdings within a short period. At the same time, non-banks began to reduce the holdings they had built up during the low interest rate period and the pandemic. The renewed increase in cash holdings as a store of value in 2024 and 2025 is likely to be attributable to the ECB’s interest rate cuts from June 2024 onwards.

Since the introduction of euro cash at the beginning of 2002, the value of euro coins in circulation issued in Germany has risen from €3.8 billion (11.1 billion coins) to €10.7 billion (45.2 billion coins) in December 2025. During the coronavirus pandemic, net issuance of German euro coins fell significantly as a result of the decline in cash use. Demand for coins remained low even after the pandemic. Nevertheless, the volume of coins in circulation continues to rise. In arithmetical terms, every person living in Germany had 541 coins worth €128 in their possession at last report, including 280 1 cent and 2 cent coins worth €4. This quantity cannot be explained by their use as a means of payment. Current estimates show that the percentages of coins held for transaction purposes in the total volume of coins in circulation have fallen significantly since 2009, especially in the case of 1 cent and 2 cent coins. In 2025, they stood at only 12.4 % (1 cent coins) and 14.9 % (2 cent coins). Only a limited number of 1 cent and 2 cent coins are used for payments, and they are not suitable as a store of value due to their low value. The costs of producing, packaging and transporting these coins are high relative to their face value. For this reason, a statutory rounding rule would also make sense for Germany, whereby cash payments would be rounded to the nearest 5 cent, a step some European countries have already taken.

1 Introduction

The public debate about demand for cash mostly focuses on making payments when shopping. The share of cash payments has been declining for years, mainly due to the growing popularity of contactless and mobile payment methods, as well as the increasing role of e-commerce. The coronavirus crisis has accelerated this trend.[1] At the same time, the value of euro banknotes brought into circulation by the Bundesbank (Bundesbank-issued euro banknotes in circulation) has continued to grow strongly. The phenomenon that demand for cash is growing even though cash is being used less and less for payments is known as the “paradox of banknotes”.[2] Looking at the use of cash for payments (transaction balances) therefore provides only an incomplete picture of cash usage.

For a number of questions, it is more suitable to consider the total value of cash brought into circulation by the Bundesbank, i.e. the sum of the transaction balances and the cash held for other purposes – for instance as a store of value. It determines the seigniorage generated from the issuance of banknotes and the issuance of coins. In addition, the developments of cash in circulation are key for banknote and coin requirement planning. The ECB and the national central banks of the Eurosystem share responsibility for issuing euro banknotes. In Germany, the Bundesbank ensures that there is a sufficient quantity of euro banknotes in circulation and that it is of good quality. According to the Coinage Act (Münzgesetz), the Federal Government is responsible for minting German euro coins (known as the coin prerogative). Decisions regarding which coins are produced and in what quantities are made by the Federal Ministry of Finance. The Bundesbank acts as a fiscal agent on behalf of the Federal Ministry of Finance: it purchases coins from the Federal Ministry of Finance at face value and brings them into circulation. The difference between face value and minting costs – known as seigniorage – flows directly to the Federal Ministry of Finance. The total value of all the coins brought into circulation every year has to be approved by the Governing Council of the ECB.

As part of the Eurosystem’s annual banknote requirement planning, the Bundesbank forecasts the quantity of new banknotes to be printed. This depends on the expected number of banknotes that are no longer fit for circulation and the projected demand. Since the Deutsche Mark era, the Bundesbank has traditionally advised the Federal Government on the expected demand for coins in the coming year. Each year in January, May and September – in the context of coin requirement planning – it forecasts the change in the volume of coins in circulation for each denomination for the Federal Ministry of Finance.[3] The more uncertainty there is surrounding the future developments of banknotes and coins in circulation, the harder these forecasts are to make – particularly in the event of trend breaks such as the coronavirus crisis.[4]

Against this backdrop, this article describes the current developments in demand for banknotes and coins issued by the Bundesbank. To this end, demand for cash is broken down into its components – transaction balances, store of value and foreign circulation – as well as according to small, medium and large denominations. The different motives behind the demand for cash are thus taken into account. The cumulative net issuance (cash in circulation), i.e. the sum of issued banknotes and coins less the sum of deposited banknotes and coins, as well as deposits and withdrawals that underlie net issuance, are considered.[5] While cash in circulation is a stock variable, withdrawals and deposits as well as their difference (net issuance) are flow variables. These flow variables are part of the banknote cycle and the coin cycle.

The banknote cycle describes the banknote payment flows between the Bundesbank, credit institutions, consumers and retailers. The Bundesbank issues banknotes to the banking industry via its branches, which then pass them on to its customers via bank counters or ATMs. Consumers use the banknotes for cash payments in retail outlets and elsewhere. The banknotes are then deposited with the Bundesbank directly by retailers or via commercial banks. The deposited banknotes are checked for authenticity and fitness for circulation and are then recirculated. Cash is usually transported by cash-in-transit companies. The banknote cycle mainly refers to the active circulation of banknotes, i.e. the banknotes that are actually used for payments at the point of sale.[6]

2 Demand for euro banknotes issued by the Bundesbank

Developments in euro banknotes in circulation up to 2021 are already well documented.[7] This article follows developments in euro banknotes in circulation until the end of 2025. At the beginning of 2002, shortly after the introduction of euro cash, banknotes in circulation within the Eurosystem still stood at €221 billion. Since then, the value has risen sharply and totalled €1,619 billion at the end of 2025 (see Chart 2.1). Euro banknotes issued by the Bundesbank recorded a particularly strong increase, rising from €73 billion at the beginning of 2002 to €990 billion by the end of 2025. It is noteworthy that, apart from during the coronavirus crisis, German banknotes in circulation grew faster than those issued by the Eurosystem excluding the Bundesbank. Initially, this was due to strong demand from abroad; since 2014, the rise in demand from non-banks as a result of low interest rates has played a growing role. The coronavirus pandemic provided a real boost: many people hoarded cash while opportunities for consumption were limited. But this boom ended when the ECB set the interest rate reversal in motion in the summer of 2022.[8] Higher interest rates made cash less attractive. As a result, credit institutions significantly reduced their cash holdings within a short period. At the same time, non-banks, too, began to reduce the holdings they had built up during the low interest rate period and the pandemic. Since then, an interesting picture has emerged: banknotes in circulation issued by the Eurosystem excluding the Bundesbank are declining, while the value of German banknotes in circulation is rising again following a brief slump – albeit to a lesser extent than before the coronavirus crisis. It is worth noting that the increase in Bundesbank-issued banknotes in circulation more than offsets the decline in the rest of the Eurosystem. As a result, the total value of euro banknotes in circulation continues to increase, albeit only slightly. The main reason for this is the high demand for German euro banknotes among non-banks, especially from within Germany. However, the growth rates of both banknotes issued by the Eurosystem in circulation and German banknotes in circulation have recently converged again; in December 2025, the growth rate in the Eurosystem excluding the Bundesbank was only slightly negative, at around −⁠ 0.4 %. German banknotes in circulation have been following a new, flatter trend since the trend break in 2022. Whether this will prove stable in the coming years remains to be seen. This leads to heightened uncertainty for banknote requirement planning.

Euro banknotes in circulation

Banknotes in circulation can be divided into those in circulation abroad (outside and within the euro area) and those used in Germany – be it for everyday payments (transaction balances) or as a store of value. This regional distribution and the uses of euro banknotes issued by the Bundesbank provide insights into the reasons driving developments in banknotes in circulation. The estimation of foreign circulation is based on two components: first, deliveries of euro banknotes to non-euro area countries by international banknote wholesale traders (net shipments) are taken into account, and second, direct net exports via the travel sector are considered.[9] In order to determine the domestic store of value, the estimated foreign circulation and the estimated stock of banknotes held for domestic transaction purposes are deducted from the total value of banknotes in circulation.[10] The transaction balances are derived from an initial value at the beginning of 2002, which arises from developments in Deutsche Mark and euro banknotes during the introduction of euro cash. This value is extrapolated using the growth rate of nominal private consumption.[11] The current estimates also take into account the fact that the share of cash payments at the point of sale – as outlined above – is declining. As a result, the new estimates for domestic transaction balances lie below previous estimates.

It is estimated that at the end of the fourth quarter of 2025, 46 % of the value of euro banknotes issued by the Bundesbank was located abroad, of which just under 30 % outside the euro area and just under 20 % in the rest of the euro area (see Table 2.1). According to estimates, the stock of banknotes in circulation abroad amounted to €459 billion, of which €186 billion was located in other euro area Member States and €273 billion in other countries. The share of banknotes in circulation abroad rose significantly over the years: from just under one-quarter at the end of 2002 to almost three-quarters at the beginning of 2014. Since then, however, it has been declining and has been below the domestic share since the beginning of 2024 (see Chart 2.2). This is due, on the one hand, to the sharp rise in domestic holdings as a store of value up to the interest rate reversal in 2022; until then, the low opportunity costs led to high demand for cash as a store of value.[12] On the other hand, the weak development of foreign circulation since the start of the coronavirus crisis plays a role in its declining share in total banknotes in circulation. The estimated stock of banknotes held for everyday transactions has stood at just under €35 billion since the start of the coronavirus pandemic, accounting for around 4 % of total banknotes in circulation.

**Table 2.1: Estimated components of euro banknotes issued by the Bundesbank at the end of** Q4 2025¹
Components	€ billion	Share in total banknotes in circulation (%)
Foreign circulation, total (estimated)	459	46
of which within the euro area	186	19
of which outside the euro area	273	28
Domestic circulation, total (estimated)	531	54
of which transaction balances	35	4
of which store of value	496	50
Banknotes in circulation (cumulative net issuance)	990	100
Sources: Bartzsch, Rösl and Seitz (2011a and 2011b) and Bundesbank calculations. 1 The values in the table have been rounded. The totals of the sub-items therefore do not necessarily correspond to the respective main items.

Regional distribution of euro banknotes issued by the Bundesbank

Looking at year-on-year changes clearly illustrates the development of German banknote circulation and its individual components. Following exceptionally high net issuance of over €60 billion in 2020 and 2021, net issuance in 2022 and 2023 was particularly low, at €16 billion and €21 billion, respectively.[13] In 2024 and 2025, too, it remained below the level prior to the coronavirus crisis (see Chart 2.3). Banknotes in circulation in Germany as well as abroad contributed to this development. The weak development of banknotes in circulation in Germany since 2022 was initially mainly attributable to balances held as a store of value (see Chart 2.4). In 2022, growth in these balances was weaker, as banks reduced their cash holdings by more than €30 billion following the interest rate reversal. Non-banks also reduced their cash holdings because higher interest rates made it less attractive to hold cash. At the same time, they began to reduce the cash reserves accumulated during the coronavirus pandemic. In 2024 and 2025, balances held as a store of value grew again. This is likely to be due, in particular, to the renewed interest rate reversal from June 2024 onwards, when the deposit facility rate was lowered from 4.00 % to 2.00 % in several steps within a year. As the chart below on sectoral demand for euro banknotes issued by the Bundesbank shows, the two components of foreign circulation developed differently: net exports via the travel sector returned to pre-crisis levels in 2022 and 2023, after having fallen sharply due to the pandemic. These were probably catch-up effects, as net exports related to travel declined again in 2024 and 2025. While these exports always contributed positively to foreign circulation, net shipments – i.e. deliveries of banknotes abroad to countries outside the euro area – have been consistently negative since 2020.[14] In 2025, negative net shipments outweighed positive net exports via the travel sector, meaning that foreign circulation declined overall for the first time since the introduction of euro cash.

Regional components of euro banknotes issued by the Bundesbank

Domestic circulation of euro banknotes issued by the Bundesbank

Demand for German euro banknotes can be broken down not only by region and use, but also by sector (see Chart 2.5). A distinction is made between banks and non-banks. Domestic credit institutions’ demand corresponds to their cash holdings. Domestic non-banks’ demand is calculated by deducting the cash holdings of banks from the estimated domestic demand. Net shipments reflect demand from foreign credit institutions, and foreign demand from non-banks corresponds to net exports via the travel sector. Since 2015, i.e. since around the start of the negative interest rate phase, the vast majority of German banknotes in circulation has been driven by demand from non-banks – primarily from within Germany. By contrast, credit institutions have significantly reduced their banknote holdings since 2021.

Sectoral demand for euro banknotes issued by the Bundesbank

A look at the withdrawals of banknotes from and deposits of banknotes with the Bundesbank, from which their net issuance is derived, provides further interesting insights.[15] These withdrawals and deposits are flow variables and play a key role in the banknote cycle in Germany.[16] Against this backdrop, there is the question of how the weak net issuance since 2022 has affected the banknote cycle. A distinction is made between small-denomination (€5, €10 and €20), medium-denomination (€50) and large-denomination (€100, €200 and €500) banknotes. Small-denomination banknotes are used primarily for everyday payments, while large-denomination banknotes are mainly used as a store of value.[17] Both purposes drive demand for €50 banknotes. As mentioned above, net issuance fell significantly to just €16 billion in 2022 and remained below its pre-pandemic level in the following years (see Chart 2.6). This sharp decline affected large-denomination banknotes exclusively. While withdrawals remained stable, deposits of large-denomination banknotes rose significantly in 2022. The reasons behind this were the ECB’s interest rate reversal and the beginning of the reduction in cash reserves built up during the coronavirus crisis.

Banknote transactions with the Bundesbank

Banknotes in circulation increased from 2022 to 2025, while annual deposits and withdrawals at the Bundesbank declined. Particularly striking is the decline in deposits: in 2024, these were around €28.3 billion lower than in the previous year. Neither increased private banknote recycling[18] – which rose by approximately €2.0 billion – nor higher cashback turnover[19] – which grew by around €1.3 billion – were able to compensate for this decline. This means that the banknotes in circulation issued by the Bundesbank continue to grow even though the total banknote cycle in Germany is lower overall. This phenomenon reflects the paradox of banknotes mentioned above.

3 Demand for euro coins issued by the Bundesbank

Circulation of euro coins has risen constantly since the introduction of euro cash (see Chart 2.7).[20] In the euro area as a whole, coin circulation has increased from €12.3 billion (38.1 billion coins) at the end of January 2002 to €35.4 billion (154 billion coins) at the end of December 2025. In the same period, the value of German coins in circulation rose from €3.8 billion (11.1 billion coins) to €10.7 billion (45.2 billion coins). The share of German euro coins in total euro coins in circulation is thus significantly smaller than the share of German euro banknotes in total euro banknotes in circulation (see Chart 2.8).

Euro coins in circulation

Bundesbank share of euro banknotes and coins in circulation (by value)

In arithmetical terms, each person living in Germany possesses 541 coins with a total value of €128. The shares of individual denominations in circulation differ depending on whether coin circulation is measured by number of coins or by value: the 1 cent and 2 cent coins (smallest-denomination coins), which now account for more than half of all coins, dominate by number of coins. Combined, the €1 and €2 coins make up only around 11 % of the total number of coins. This means that, in arithmetical terms, each person living in German possesses 280 1 cent and 2 cent coins, but only 58 coins in €1 and €2 denominations. By value, the picture is reversed: the €2 coin accounts for more than half of the total value of coins in circulation, followed by the €1 coin, which accounts for 18 %. Combined, the three smallest denominations (1 cent, 2 cent, and 5 cent coins) constitute only around 6 % of the total value of coins in circulation. Per capita, €93 is attributable to €1 and €2 coins, but only €4 to 1 cent and 2 cent coins.

As with banknotes, coin circulation consists of various components: domestic transaction balances for payments, domestic store of value (including lost, collected, or destroyed coins), and circulation abroad. According to estimates by Altmann and Bartzsch (2014) carried out using the seasonal method, the transaction balances of euro coins in Germany amounted to €2.3 billion in 2011, which corresponded to around 36 % of total coins in circulation.[21] The volume of coins used as a store of value (hoarding) and the volume in circulation abroad are calculated as the difference between the total volume of coins in circulation and the estimated volume held for transaction purposes (see the supplementary information entitled “Foreign circulation and hoarding of German euro coins”). Under the plausible assumption that transaction balances have remained unchanged since 2011, the estimated values of these components were extrapolated for the years 2012 to 2025.[22] The difference between total coins in circulation and the value of coins held for transaction purposes, which is assumed to be constant, grows considerably over time – especially for 1 and 2 cent coins and the €2 coin. Between the beginning of 2012 and the end of 2025, with transaction balances being constant by assumption, circulation of the €2 coin rose by around 84 %.

Foreign circulation and hoarding of German euro coins

Figures for national coin circulation (cumulative net issuance) are the combination of domestic and foreign circulation. Foreign circulation can be further broken down into coins circulating outside the euro area and coins circulating within it. It is calculated on the basis of cumulative net outflows. If a euro area country has seen more coins flow outwards to other countries than inwards from abroad, foreign circulation is positive; if the opposite is the case, foreign circulation is negative, meaning that domestic demand is partly being covered by foreign coin issuers. Domestic circulation is made up of coins for transaction purposes and coinage that is being hoarded, in other words coins that have been saved, collected or lost.[1] These components of coin demand are not directly observable and have to be estimated. The following provides a summary of what we know about the hoarding and foreign circulation of euro coins issued in Germany (“German” euro coins).[2]

We can use developments in shares of German coins as a proportion of all euro coins in circulation to give a rough estimate of total foreign circulation.[3] If the domestic demand for cash develops evenly across the various members of a monetary union and there are net cash flows from one member country to elsewhere (within or outside the euro area), over time this will lead to that country’s share of the total amount of cash circulating in the currency union growing larger.[4] However, figures for German euro coins as a proportion of total euro coins in circulation have remained fairly stable over time for all denominations (see Chart 2.9). Assuming that the domestic demand for coins in Germany develops as it does in the euro area excluding Germany, this would suggest that – unlike in the case of banknotes – there is no net migration of coins from Germany to abroad.

German-issued coins as a share of Eurosystem coins in circulation

With regard to foreign circulation of German euro coins in the rest of the euro area, this assumption is borne out by a Bundesbank sample of coin migration in the euro area. Each year, the Bundesbank uses coin samples taken from branch deposits to analyse where coins come from.[5] Around 60,000 €2, €1, 50 cent and 20 cent pieces each are examined per year. Model calculations show that roughly the same number of these coins flow from Germany to other euro area countries as vice versa.[6] These estimates are subject to uncertainty, however.

There are three avenues via which German euro coins end up in countries outside the euro area. First, German tourists and business travellers take coins with them to certain holiday destinations (for example, Turkey) for the purpose of making transactions. Second, they make their way into countries outside the euro area that have pegged their currencies to the euro.[7] Third, tourists and business travellers from non-euro area countries take euro coins back home with them after visiting the euro area. In the case of the first channel, it can be assumed – as with coin migration within the euro area – that tourists and business travellers take just as many coins with them to countries outside the euro area as they bring back from those countries. As such, there is no net export of German euro coins. The second channel concerns only a handful of small countries and areas, such as Montenegro, Kosovo and Monaco; the volumes involved are negligible. The most important channel is the third one: tourists from non-euro area countries take euro coins home from their travels, where they – unlike banknotes – can usually not be exchanged and so end up being hoarded. A large portion of these coins never make it back to Germany and can be regarded as permanently hoarded.[8] Given Germany’s popularity as a travel destination, “seepage” loss of this kind could be significant. According to the European Central Bank (2017), however, euro coin holdings outside the euro area are negligible overall.

Overall, foreign circulation of German euro coins probably plays only a minor role. The difference between the value of German euro coins in circulation and domestic transaction balances is therefore likely to be principally down to domestic coin hoarding. This assumption is supported by the case of Deutsche Mark coin circulation. First, the share of Deutsche Mark coins circulating abroad was small.[9] Second, the large quantities of Deutsche Mark coins that have yet to return to the Bundesbank, as well as the slowness with which the volume of Deutsche Mark in circulation is declining, point to there being a high proportion of coins which are permanently hoarded or lost (see Table 2.2).[10] At 56 %, small-denomination 1 pfennig and 2 pfennig coins account for the largest share of the Deutsche Mark coins still in circulation.

**Table 2.2: Loss ratios for** DM coins
DM denomination	Coins in circulation as at 31 December 2025 (in thousands)	Coins in circulation as at 31 December 1999 (in thousands)	Loss ratio (%)
5	355,833	1,135,507	31.34
2	335,738	1,181,715	28.41
1	757,790	2,320,860	32.65
0,5	898,667	2,269,613	39.60
0,1	4,383,011	10,685,573	41.02
0,05	3,244,290	6,472,055	50.13
0,02	3,372,264	7,543,218	44.71
0,01	9,553,834	16,718,159	57.15
Summe	22,901,426	48,326,699	–
Based on Deutsche Bundesbank (2013b).

In simpler terms, hoarded coins can also be referred to as coinage kept as a store of value.
See Deutsche Bundesbank (2015c).
See Deutsche Bundesbank (2019).
In value terms, the Bundesbank’s share of euro banknote circulation rose fairly evenly from 35.9 % at the end of 2002 to 61.1 % at the end of 2025. This increase is likely to be caused by the migration of euro banknotes from Germany to other countries within and outside the euro area.
The migration of euro coins is of relevance for coin requirement planning and the distribution of coin revenue between the euro area countries.
See Deutsche Bundesbank (2019).
In some cases, this is the result of bilateral agreements with euro area countries; in other cases, it is by unilateral decision of the country in question; see European Central Bank (2026).
See Bos (1994).
See Deutsche Bundesbank (2003), p. 161
See Deutsche Bundesbank (2013b).

This development becomes even clearer when looking at transaction balance shares, which are calculated as the ratios of transaction balances to coin circulation (by denomination). As coin circulation continues to grow, but transaction balances remain constant, the transaction balance shares are in continual decline (see Charts 2.10, 2.11, 2.12 and 2.13).[23] In terms of total coins in circulation by value, the transaction balance share fell from 40.8 % in 2007 to 21.7 % in 2025. Especially low are the shares of 1 cent and 2 cent coins: 12.4 % (1 cent) and 14.9 % (2 cent) in 2025. This is because these coins are often set aside or lost.[24] For the medium-denomination coins, the transaction balance shares are significantly larger than the shares in total coin circulation; the 50 cent coin had the highest share, which was 33 % at last count. For the large-denomination coins, the share of the €1 coin is lower than that of the 50 cent coin, but has converged significantly. Noteworthy is the relatively low transaction balance share of the €2 coin, which, although higher than the shares of the small-denomination coins, is considerably lower than the shares of the medium-denomination coins and the €1 coin. This represents an exception to the rule that transaction balances rise with denomination size. This is likely due to the fact that the high value of the €2 coin makes it particularly suitable for saving. In addition, it is also in demand as a collector’s item, especially in the form of €2 commemorative coins, for example from the “Federal States” series.[25]

Domestic transaction balances as a share of total German euro coins in circulation (by value)

Domestic transaction balances as a share of German euro coins in circulation (by value), small-denomination coins

Domestic transaction balances as a share of German euro coins in circulation (by value), medium-denomination coins

Domestic transaction balances as a share of German euro coins in circulation (by value), large-denomination coins

Abolishing 1 cent and 2 cent coins could make payment transactions more efficient and more sustainable. Due to their low value, 1 cent and 2 coins are unpopular and hardly suitable as stores of value.[26] They often end up in piggy banks or are lost. Relative to their nominal values, the costs of producing, packaging and transporting these coins are high. 1 and 2 cent coins are used mainly to pay out exact amounts. The National Cash Forum has therefore asked the Federal Ministry of Finance to advocate for, and press ahead with, a statutory rounding rule in Germany, whereby cash payments would be rounded up or down to the nearest 5 cent.[27] This is already the norm in some European countries, such as Finland and the Netherlands, but there is as yet no common European solution. The low and still diminishing transaction balance shares of 1 and 2 cent coins estimated in this article also represent an argument in favour of such a rounding rule.

Lastly, annual deposits and withdrawals of euro coins at the Bundesbank, as well as the corresponding net issuance, are taken into consideration. As with banknotes, deposits and withdrawals play a key role in the coin cycle, too. Due to their low value, however, the number of coins, rather than the value, is at the focus here.[28] In 2021, net issuance fell significantly, which was attributable primarily to the decline in cash usage during the COVID-19 pandemic (Chart 2.14). Demand for coins has not recovered since the end of the pandemic. Net issuance dropped further in 2023 and declined to just over one-third of its pre-crisis level in 2025. This development is due mainly to lower demand for the smallest-denomination coins and medium-denomination coins issued by the Bundesbank, which could be related to commercial banks decreasingly accepting and providing coins. To some extent, this gap is being closed by manufacturers of vending machines that – for a fee – exchange coins for vouchers which can be used or paid out at the point of sale. Nevertheless, net issuance was positive every year, which means that the circulation of German euro coins has continued to grow even after the COVID-19 pandemic – but by far not as strongly as before.[29] Withdrawals of all denominations fell sharply as early as 2020 and, since 2024, have been in significant decline again. Deposits also exhibit a similar trend. Overall, amid declining deposits and withdrawals, coin circulation has continued to grow since the COVID-19 pandemic, but by far not as strongly as before the crisis. Based on the estimates presented here, the increase in coins in circulation is attributable to domestic hoarding.

Coin transactions with the Bundesbank

4 Conclusion

The strong growth in Bundesbank-issued banknotes in circulation during the COVID-19 pandemic ended abruptly with the ECB’s interest rate reversal in the summer of 2022. Since then, while the value of German banknotes in circulation has continued to grow, this has been considerably slower than before the pandemic. Since the trend break in 2022, it has followed a new, flatter path of growth. Whether this trend will prove stable in the coming years remains to be seen. This increases the uncertainty in banknote requirement planning.

While the value of German banknotes in circulation (stock) is continuing to rise even after the end of the COVID-19 pandemic, the underlying deposits and withdrawals at the Bundesbank (flows) have declined without being offset by private recycling. This means that the value of Bundesbank-issued banknotes in circulation is continuing to rise while the banknote cycle – which represents the payment flows of banknotes between the Bundesbank, credit institutions, consumers, and retailers – is contracting overall. This development reflects the declining share of purchases made using cash.

Unlike in the past, the dynamic growth of German banknotes in circulation is no longer being driven by foreign demand. The significance of foreign demand has been in decline since 2014. Its share in total circulation has fallen, with a brief interruption, from 73 % at that time to 46 % in the fourth quarter of 2025. This is due, first, to the sharp rise in domestic demand for banknotes as a store of value during the period of low interest rates and, second, to weak foreign demand for euro banknotes since the outbreak of the COVID-19 pandemic. In 2025, foreign circulation decreased overall for the first time since the introduction of euro cash.

As was the case before the COVID-19 pandemic, the value of banknotes brought in circulation by the Bundesbank and the value of banknotes issued by the Eurosystem (excluding the Bundesbank) are diverging again. While German banknotes in circulation have risen by around €90 billion since the end of 2022, net issuance by the rest of the Eurosystem has declined by just over €40 billion over the same period. The main reason for this is the high demand for German euro banknotes among non-banks, especially from within Germany.

During the COVID-19 pandemic, net issuance of German euro coins fell significantly as a result of the decline in cash use. Demand for coins remained low even after the pandemic. Nevertheless, coins in circulation continue to rise. At the same time, fewer and fewer coins are actually being used to make payments. In arithmetical terms, each person living in Germany possesses 541 coins with a total value of €128. In terms of number of coins, the smallest-denomination coins (1 cent and 2 cent) dominate, accounting for more than half of all coins. However, this high volume of coins in circulation cannot be explained by their use as a means of payment. Due to their low value, 1 cent and 2 cent coins are hardly suitable as a store of value. They are used primarily to pay out exact amounts, but often end up in piggy banks or are lost. In this article, earlier estimates for the share of transaction balances in coin circulation were extrapolated up to 2025. Since 2009, these shares have fallen significantly for all denominations and are lowest for the smallest-denomination coins: 12.4 % (1 cent) and 14.9 % (2 cent) in 2025. This highlights the limited significance of the smallest-denomination coins in payments. Against this backdrop, a rounding rule whereby cash payments would be rounded up or down to the nearest 5 cent is under discussion.

5 List of references

Altmann, M. and N. Bartzsch (2014), The Volume of Euro Coins held for Transaction Purposes in Germany, ROME Discussion Paper Series No 14–06e.

Bartzsch, N., M. Brandi, L. Devigne, R. de Pastor, G. Maddaloni, D. Posada Restrepo and G. Sene (2023), Forecasting banknote circulation during the COVID-19 pandemic using structural time series models, Deutsche Bundesbank Discussion Paper No 20/2023.

Bartzsch, N., G. Rösl and F. Seitz (2025), Cash demand in times of crises: a global perspective, Bank & Credit, Vol. 56, No 1, pp. 1–44.

Bartzsch, N., G. Rösl and F. Seitz (2011a), Foreign demand for euro banknotes issued in Germany: estimation using direct approaches, Deutsche Bundesbank Discussion Paper No 20/2011.

Bartzsch, N., G. Rösl and F. Seitz (2011b), Foreign demand for euro banknotes issued in Germany: estimation using indirect approaches, Deutsche Bundesbank Discussion Paper No 21/2011.

Bos, J. W. D. (1994), The demand for coins in the Netherlands, De Nederlandsche Bank, Quarterly Bulletin, June 1994, pp 67–90.

Deutsche Bundesbank (2025a), Die Euro-Münzen, as at 2025.

Deutsche Bundesbank (2025b), National Cash Forum advocates binding statutory rounding rule for cash payments, press release of 11 March 2025.

Deutsche Bundesbank (2024a), Payment behaviour in Germany in 2023.

Deutsche Bundesbank (2024a), Demand for banknotes during crises: an international perspective, Monthly Report, March 2024, pp. 65–100.

Deutsche Bundesbank (2022), Demand for euro banknotes issued by the Bundesbank: current developments, Monthly Report, April 2022, pp. 67–83.

Deutsche Bundesbank (2019), The mixing of euro coins in Germany, Monthly Report, December 2019, pp. 73–83.

Deutsche Bundesbank (2018), The demand for euro banknotes at the Bundesbank, Monthly Report, March 2018, pp. 37–51.

Deutsche Bundesbank (2015a), Euro coins held for transaction purposes in Germany, Monthly Report, April 2015, pp. 61–74.

Deutsche Bundesbank (2015b), Seasonal method, Monthly Report, April 2015, pp. 64–65.

Deutsche Bundesbank (2015c), Foreign demand for German euro coins, Monthly Report, April 2015, p. 72.

Deutsche Bundesbank (2015d), Payment behaviour in Germany in 2014 – Third study of the utilisation of cash and cashless payment instruments.

Deutsche Bundesbank (2013a), Current and projected development of coin circulation in Germany, Monthly Report, January 2013, pp. 29–41.

Deutsche Bundesbank (2013b), D-Mark coin circulation, Monthly Report, January 2013, p. 38.

Deutsche Bundesbank (2011a), Foreign demand for euro banknotes issued in Germany, Monthly Report, January 2011, pp. 29–41.

Deutsche Bundesbank (2011b), The banknote cycle and banknote recycling in Germany, Monthly Report, January 2011, pp. 17–27.

Deutsche Bundesbank (2011c), The German banknote cycle in 2009, Monthly Report, January 2011, p. 20.

Deutsche Bundesbank (2009), The development and determinants of euro currency in circulation in Germany, Monthly Report, June 2009, pp. 45–58.

Deutsche Bundesbank (2003), Münzgeldentwicklung in Deutschland – Eine empirische Studie über den Münzgeld- und Banknotenumlauf in der Bundesrepublik Deutschland mit einer Prognose der Münzgeldnachfrage bis 2007, March 2003.

EHI (2025), Zahlungssysteme im Einzelhandel 2025 – Daten, Fakten, Marktstrukturen.

European Commission (2025), Flash Eurobarometer 570: The euro area.

European Central Bank (2026), The euro internationally.

European Central Bank (2017), Estimation of euro currency in circulation outside the euro area..

Lalouette, L., A. Zamora-Pérez, C. Rusu, N. Bartzsch, E. Politronacci, M. Delmas, A. Rua, M. Brandi and M. Naksi (2021), Foreign demand for euro banknotes, ECB Occasional Paper No 253.

Zamora-Pérez, A. (2021), The paradox of banknotes: Understanding the demand for cash beyond transactional use, ECB Economic Bulletin, Issue 2/2021, pp. 121–137.

The share of cash payments by individuals measured in terms of transactions (in terms of turnover) fell from 74 % (48 %) in 2017 to 60 % (32 %) in 2020, dropping further to 51 % (26 %) in 2023; see Deutsche Bundesbank (2024a).
See Zamora-Pérez (2021).
For more information on coin requirement planning, see Deutsche Bundesbank (2013a). Given that coins have a lifespan of 20 to 30 years, the need to replace euro coins which are no longer fit for and withdrawn from circulation is currently not as important as the need arising from a growing demand.
For information on the inclusion of outliers and trend breaks in structural time series models for forecasting banknote circulation, see Bartzsch et al. (2023) and Deutsche Bundesbank (2022).
The cumulative net issuance of euro banknotes by the Bundesbank corresponds to the arithmetical volume of banknotes in circulation. This means that it is calculated from the sum of all banknotes issued by the Bundesbank less all of those deposited with the Bundesbank. In the following, these euro banknotes issued by the Bundesbank are referred to as “German” euro banknotes or “German” euro banknotes in circulation. It should be noted that these banknotes are not exclusively located in Germany and that a considerable share of them are, in fact, in circulation abroad. The cumulative net issuance of euro coins is calculated in the same way. According to this definition, these “German” euro coins do not necessarily have to have a “German” national reverse side, since the Bundesbank also (re)circulates coins with foreign reverse sides.
See Deutsche Bundesbank (2011b).
For the period from the introduction of euro cash at the beginning of 2002 to the end of 2009, see Deutsche Bundesbank (2009, 2011a). For the period from the start of 2010 to the end of 2017, see Deutsche Bundesbank (2018). For the period from the start of 2018 to the end of 2021, see Deutsche Bundesbank (2022).
The deposit facility rate was raised from −⁠ 0.50 % to 0.00 % as at 27 July 2022 and was raised further to 0.75 % with effect from 14 September 2022.
See Bartzsch et al. (2011a), Section 3.1, and Deutsche Bundesbank (2011a). As international banknote wholesale traders buy euro banknotes from the Bundesbank, net shipments are recorded in the Bundesbank’s accounts. The net exports of euro banknotes via the travel sector are recorded regularly by the Bundesbank when it compiles the balance of payments statistics. Travel is an important reason behind demand in international banknote wholesale trade, as this channel supplies, inter alia, bureaux de change with banknotes for tourism purposes.
For simplicity, this residual is referred to here as domestic store of value rather than domestic non-transaction balances. It comprises all banknote holdings that have not been destined for transactions or rather cash spending. Besides the stocks held as a store of value, this also includes precautionary cash holdings, cash held by banks to avoid negative interest rates and lost banknotes. Precautionary cash holdings are used as provisions for unforeseen opportunities for spending and unforeseen bottlenecks in the availability of cash. They also play an important role in crises; see Bartzsch et al. (2025) and Deutsche Bundesbank (2024b).
See Bartzsch et al. (2011b), Section 2.2.6.
The three-month EURIBOR rate declined from 0.33 % in May 2014 to −⁠ 0.01 % in May 2015 and fell further to −⁠ 0.55 % by January 2021.
The annual growth rate of banknotes in circulation issued by the Bundesbank was even negative from March 2023 up to and including July 2023 (see Chart 2.1).
This means that more euro banknotes flow back to the Bundesbank than it issues via the international banknote wholesale trade. The determinants of net shipments are empirically examined in Lalouette et al. (2021), Section 2.3, using a vector autoregressive (VAR) model.
Net issuance corresponds to the change in banknotes in circulation and is a flow variable. By contrast, banknote circulation (cumulative net issuance) is a stock variable.
See Deutsche Bundesbank (2011b).
The €100 banknote is issued not only at bank counters but also via ATMs in some cases.
Banknote recycling involves receiving, checking and reissuing banknotes to households and enterprises. Automated banknote recycling is carried out via machines used by either bank customers or bank staff. Private cash handlers wishing to offer cash recycling services must comply with the European regulations for the independent processing and reissuance of banknotes in Germany that have been in effect since 2006; see Deutsche Bundesbank (2011b).
“Cashback” refers to the option of additionally withdrawing cash when making a payment in a retail outlet. Banknotes disbursed as cashback do not need to be checked for authenticity or fitness beforehand. For more information on cashback turnover, see EHI (2025).
Euro coins in circulation are all coins with nominal values from 1 cent to €2, including €2 commemorative coins (e.g. from the “Federal States“ series). These coins are legal tender throughout the entire euro area. By contrast, €10 coins and euro gold coins (€20, €100 and €200 coins) are considered purely collectors’ coins and are not counted as coins in circulation.
A summary of the study conducted by Altmann and Bartzsch (2014) can be found in Deutsche Bundesbank (2015a, 2015b, 2015c). The seasonal method is described in Deutsche Bundesbank (2015b). The basic assumption of this estimation approach is that the seasonal pattern of domestic transaction balances is different to that of the other components of German euro coin circulation (domestic hoarding and foreign circulation). As a result, the seasonal pattern of total circulation is subdued. As domestic coin demand for transaction purposes cannot be observed directly, it must be depicted as best as possible using a suitable transaction variable. Altmann and Bartzsch (2014) used real cash consumption for this purpose.
The transaction balances estimated by Altmann and Bartzsch (2014) remained broadly constant at the end of the estimation period (up to 2011). According to the studies on payment behaviour conducted by the Bundesbank, the volume of coins carried in wallets has hardly changed since 2011; see Deutsche Bundesbank (2015d), Section 3.1 and Deutsche Bundesbank (2024a), Section 3.1. It should be noted that the coin holdings in household (consumer) wallets surveyed by the payment behaviour studies represent only a portion of the domestic transaction balances examined here and are therefore lower. In addition, total transaction balances also comprise the balance of change at checkouts in shops, the balance of coins in entertainment and vending machines, as well as the balance of coins held by credit institutions. For estimates of these sectoral transaction balances of euro coins, see Deutsche Bundesbank (2015a).
This applies generally and in particular to “mature”, i.e. old coins in circulation. For instance, in 2000, the volume of Deutsche Mark coins held for domestic transaction purposes as a share of the total value of Deutsche Mark coins in circulation was estimated to be 15 %; see Altmann and Bartzsch (2014), Section 4.
At the end of 2025, there were still 22.9 billion Deutsche Mark coins in circulation. Of this figure, just under 13 billion coins – or more than half of the total – were 1 pfennig and 2 pfennig coins.
See Deutsche Bundesbank (2025a).
In the most recent Eurobarometer, a majority of respondents were in favour of abolishing the 1 cent and 2 cent coins and replacing them with a mandatory rounding rule, whereby total purchase amounts in shops and supermarkets would be rounded to the nearest 0 cent or 5 cent. This was supported by 56 % of respondents in Germany and 61 % of respondents in the euro area. See European Commission (2025).
See Deutsche Bundesbank (2025b). The National Cash Forum was established in February 2024 on the initiative of the Bundesbank to safeguard cash as a widely used means of payment and to ensure its availability. The Forum consists of representatives from the associations of the banking industry, retail trade, consumer protection, the cash-in-transit industry, and vending machine operators, amongst others.
In the banknote cycle, by contrast, consumer cash expenditure plays a key role; see Deutsche Bundesbank (2011c).
Net issuance corresponds to the change in coins in circulation.

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