Keep calm and carry cash: lessons on the unique role of physical currency across four crises

Despite payment digitisation, euro banknote demand remains robust and has sharply intensified during crises. This article examines the role of cash as a safe haven and contingency instrument during four diverse crisis episodes in the euro area (the COVID-19 pandemic, Russia’s invasion of Ukraine, the April 2025 Iberian blackout and the Greek sovereign debt crisis), each differing in shock type (health, geopolitical, infrastructure, sovereign debt) and geographical scope (euro area-wide, regional and national). We combine descriptive analysis of monthly and daily currency data with Bayesian causal impact models using daily net issuance and automated teller machine (ATM) withdrawals. This allows us, for the first time in this context, to statistically attribute significant public demand surges to specific shocks. The results highlight that the unique attributes of cash – its tangibility, offline functionality and status as a direct central bank liability – become paramount during stress, across different types of crises and geographies, fulfilling specific roles in each case. We argue that, beyond individual utility, cash provides crucial system-wide benefits such as payment redundancy and decentralised liquidity. These findings underscore the importance of policies ensuring continued access to cash and recognising its fundamental contribution to economic stability and crisis preparedness. JEL Classification: E41, E58, E42, H12, C54