The European Central Bank’s Advice: “Keep Calm and Carry Cash”
Despite the increasing prevalence of digital payments, the European Central Bank (ECB) is advising households to maintain a small cash reserve to prepare for potential crises. This suggestion stems from a recent ECB study, aptly titled “Keep calm and carry cash,” which analyzed the impact of recent disruptive events on payment systems and consumer behavior.
The study examined four significant crises – the COVID-19 pandemic, the 2022 Russian invasion of Ukraine, the Greek debt crisis, and the April 2025 Iberian blackout – and found that cash remains a vital and irreplaceable payment method during emergencies. The ECB views cash as a crucial “alternate tire” for the payment system, offering resilience when digital infrastructure fails.
Evidence from thes events supports this view. During the initial 90 days of the COVID-19 pandemic in 2020, Europeans withdrew an additional €19.5 billion in cash beyond expected levels. Similarly, following the Russian invasion of Ukraine in February 2022, countries bordering the conflict, like the Baltic states and Finland, experienced cash issuance rates six to ten times higher then normal.
More recently, the Iberian blackout in April left over 50 million people in Spain and Portugal without power, disrupting digital payment systems and rendering cards and ATMs unusable. Businesses that accepted cash were able to continue operating,highlighting the limitations faced by those without physical currency.
The ECB isn’t suggesting stockpiling large sums of money. Instead, official recommendations from countries like Austria, the Netherlands, and Finland suggest keeping between €70 and €100 per person – enough to cover essential expenses for 72 hours. Sweden recommends storing the equivalent of one week’s worth of essential spending on food, medicine, and fuel.
Beyond practical considerations, the ECB study points to a psychological benefit. Holding cash provides a sense of control and security during uncertain times, tapping into a behavioral economic principle known as “aversion to loss.” Cash is tangible, autonomous of internet access, electricity, or banking systems, and offers transaction privacy.
The ECB emphasizes that widespread cash holdings create a decentralized liquidity network, bolstering societal functionality even when other systems fail. The study concludes that, just as citizens prepare emergency kits with flashlights and radios, cash should be considered an integral part of crisis preparedness, ensuring redundancy and confidence in critical moments.
