European central banks are putting in place measures to ensure the supply of banknotes across the continent, as demand and supply fluctuates wildly during the global pandemic.
During the crisis the demand for cash has become less predictable, says the European Central Bank in a blog post penned by board member Fabio Panetta - in mid-March reaching the historical peak of EUR19 billion in circulation last seen at the height of the 2008 financial crisis.
In early April cash demand returned to normal levels, and several countries are now seeing cash withdrawals below expected levels as national lockdowns limit the opportunities for spending.
While maintaining that national central banks have large stocks of cash on hand, Panetta admits the current lockdown is hampering many business-as-usual activities and preventing others altogether.
"As a result, we are adapting our processes on an ongoing basis to ensure that the banknotes supply chain remains intact. We have intensified the (virtual) contacts that take place between the ECB - acting as coordinator - and the NCBs and, at national level, between the NCBs and external partners such as cash-in-transit companies and banks," he writes.
Panetta says that possible bottlenecks in printing - including the availability of raw materials - and processing banknotes for circulation are being "swiftly addressed".
Measures are also being taken to address problems in the transportation and processing of banknotes caused by staff being confined to their homes. "And when the usual cross-border transportation systems - especially air transport - are disrupted due to the limited number of available flights or concern that bank couriers and carrier personnel might need to be quarantined after travelling abroad, the transfer of banknotes among NCBs is re-scheduled."
To dispel concerns about the possible contanimation of banknotes, the ECB has commenced research with a number of top-tier European laboratories to assess the behaviour of coronaviruses on different surfaces.
The results indicate that coronaviruses can survive more easily on a stainless steel surface than on our cotton banknotes, with survival rates approximately 10 to 100 times higher in the first few hours after contamination. Other analyses indicate that it is much more difficult for a virus to be transferred from porous surfaces such as cotton banknotes than from smooth surfaces like plastic.
"Overall, banknotes do not represent a particularly significant risk of infection compared with other kinds of surface that people come into contact with in daily life," he says. "However, our cooperation with scientific laboratories will continue in the coming weeks to preserve public trust in the safety of banknotes."
On the prospect of a move to the issuance of a 'digital euro', Panetta says a "high-level task force" is currently examining the pros and cons of introducing a digital currency, for use by both intermediaries and citizens.