Gareth Shaw, from the consumer group Which?, said: “Digital payments simply aren’t an option for some consumers – particularly if they are vulnerable or live in isolated communities – and it is vital that they are not abandoned. The Bank’s research showed that in the run-up to the national lockdown in March there was a growth in demand for bank notes as people withdrew cash as a response to heightened uncertainty. Some campaign groups have warned that this risks leaving vulnerable people with no access to cash even though they may be reliant on it. The move away from cash has been a long-term trend, but the crisis has accelerated changes in shopping habits and the options on offer to consumers. The study found that the level of virus remained stable for an hour, but over the next five hours it declined rapidly, and after 24 hours it had dropped to less than 1% on both types of note.Īlthough the Bank cautioned that “just because low levels of virus are observed, it does not mean that they are at a level that can cause infection”, it said other surfaces posted more risk when people were out and about. After contamination, the notes were stored at room temperature and repeatedly tested. ![]() Its study involved a very high dose of coronavirus, equivalent to someone coughing or sneezing directly on to the bank note, and included tests on paper and polymer £10 notes. ![]() However, the Bank’s research found that the risk of getting coronavirus from handling bank notes was much lower than that of contracting it from breathing air particles in a shop, or from touching items like shopping baskets, door handles or self-checkout terminals. The increased demand for small-denomination notes mainly reflects positive developments in private consumption.After reopening following the first lockdown, many shops and hospitality venues encouraged consumers to make contactless payments, while some refused to take any cash. In addition, the financial market and sovereign debt crises have helped to render cash holdings more attractive. The persistently low level of interest rates is a major factor in the rise in demand for banknotes. Since 2008, cash has regained its significance as a store of value. Later on, general uncertainty during the First World War, in particular, as well as deflation at the beginning of the 1920s and again during the Great Depression in the 1930s, all contributed to the stockpiling of banknotes. Initially, the reason for this development was the increasing replacement of metal coins and drafts by banknotes in the early years of the SNB’s existence. By contrast, the first four decades of the century saw banknote circulation rising as a proportion of nominal GDP. This development reflects the progress in payment technology, which has contributed to cashless payment transactions becoming more widespread and allowed companies and households to keep less cash on hand. In the 1960s, the proportion of banknotes in circulation, at 16% of GDP, was higher than it is today. In other words, banknote circulation has risen at a slower rate than nominal GDP. This shows that the ratio between banknote circulation and nominal GDP has fallen steadily since the end of the Second World War. The illustration above depicts the path of banknote circulation in relation to nominal gross domestic product (GDP). The increase in banknote circulation is, in part, also a reflection of economic growth. The growth rate for banknote circulation in real terms is decidedly smaller, but still considerable at 8,607%. After that, from the end of 1907 to the end of 2021, nominal banknote circulation increased by 99,204%. These figures include banknotes of the former banks of issue, which circulated parallel to SNB banknotes until 1910, as well as Bundeskassenscheine (certificates redeemable in gold), which were issued by the Confederation and in circulation between 19. The illustration below shows the development of nominal banknote circulation and of banknote circulation in real terms, deflated using consumer prices (at the price level of 1907). To some extent, this corresponds to inflation. The high proportion of large denominations indicates that banknotes are used not only as a means of payment but also – to a considerable degree – as a store of value.īanknote circulation has risen drastically in terms of value since the SNB started business in 1907. * These banknotes belong to the sixth series ![]() Table: Swiss banknotes in circulation on average in 2021 ![]() Survey of Swiss companies on payment methods.Instruction sheets on banknotes and coins.
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