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The European Central Bank’s (ECB) article “Keep Calm and Carry Cash” studies the demand for euro banknotes across several crisis episodes (pandemic, war, blackout) and finds that cash plays a unique safe-haven and contingency role beyond its day-to-day transactional function.
During sudden crises-like COVID-19, Russia’s war in Ukraine, and the 2025 Iberian electricity blackout-surges in cash acquisition were observed, including sharp increases by households and vault holdings by banks. The paper shows that while day-to-day use of cash may decline in crises, the precautionary demand for cash increases sharply, reflecting its offline, tangible, and widely accepted nature.
The ECB argues that central banks and policymakers should design cash infrastructure and forecasting models with these stress-response dynamics in mind-preparing for volatility, ensuring adequate supply, and maintaining access even when systems face disruptions.
This work reinforces that cash cannot be treated merely as a legacy medium to be phased out. For central banks and regulatory bodies (including digital payment regulators), planning must account for cash’s emergency role. It also underscores the need for redundancy and robustness in payment systems.
Follow the full article here: Keep Calm and Carry Cash (ECB)