Editing Cash (section)

==Cash in circulation==

Cash in circulation is characterized by strong seasonal fluctuations. Wage and salary payment dates, tax payment dates or holidays lead to statistically perceptible increases in cash in circulation, for which the credit institutions are preparing. Since cash holdings at banks do not earn interest and can also lead to security problems ([[bank robbery]]), banks usually only hold very small amounts of cash. They are therefore forced to involve the central bank in times of higher cash requirements. Therefore, the cash in circulation only remains unchanged if the banks hand over cash from their own cash holdings to their bank customers or take cash deposits from their customers into their own holdings.

The ratio of the cash in circulation in relation to the [[gross domestic product]] (cash to GDP ratio) is a good indicator of cash usage and payment behavior in an economy. In countries like the United States, increased use of debit and credit cards is increasing the amount of cash in circulation at a slower rate than in countries with a high amount of cash payments. In 2018, it ranged from 1.3% (in [[Sweden]]) to more than 21% (in Japan), 10.5% in Switzerland and 10.7% in the eurozone.<ref>{{Cite web |url=https://de.statista.com/statistik/daten/studie/874085/umfrage/anteil-des-bargeldumlaufs-am-bip-nach-weltweiten-waehrungen/ |title=Anteil des sich im Umlauf befindlichen Bargeldes ausgewählter Währungen am Bruttoinlandsprodukts (BIP) des jeweiligen Währungsgebiets im Jahr 2018 |date=2022-01-20 |access-date=2022-12-12 |language=de |trans-title=Cash-to-GDP ratio of selected currencies in 2018}}</ref> 

Since around 2018, exacerbated by the COVID-19 pandemic, cash in circulation in the [[eurozone]] has increased significantly while the share of cash payments (i.e. transactions) has decreased, known as the ''paradox of banknotes''. Analyzes show that private households are increasingly keeping cash as a precaution against crises and that [[Interest rate|negative interest rates]] also play a role.<ref>{{Cite journal |url=https://www.ecb.europa.eu/pub/economic-bulletin/articles/2021/html/ecb.ebart202102_03~58cc4e1b97.en.html |title=The paradox of banknotes: understanding the demand for cash beyond transactional use |date=2021-04-01 |access-date=2022-12-12 |website=[[European Central Bank]] |last=Zamora-Pérez |first=Alejandro}}</ref> This effect is also observed in many other currency areas, e.g. in the [[United States]] and [[Japan]].<ref>{{Cite web |url=https://www.boj.or.jp/en/research/wps_rev/rev_2021/data/rev21e06.pdf |title=Developments in Banknotes in Circulation since the Start of the Pandemic |date=2021-12-01 |access-date=2022-12-12 |website=[[Bank of Japan]] |last=Yoshizawa |first=Kento |quote=Reasons for the paradox observed globally before the pandemic were that while transaction demand for banknotes has been negatively affected by the increase in cashless payments, non-transaction demand for banknotes has increased reflecting low interest rates and precautionary demand.}}</ref>