Recent research shows that during normal times, households use both cash and cryptocurrency, with cash serving everyday transactions and as a precautionary reserve, while cryptocurrency is largely used for speculation. When economic stress occurs, households shift to cash, which is viewed as a safe, usable backstop, explaining why banknotes remain in demand. The study finds that cryptocurrency rarely functions as a medium of exchange – only 1.4 % of consumers use it for spending – and loses its store‑of‑value role when needed. Policymakers should therefore focus regulatory efforts on protecting speculative holders, while payment‑system policy should address the niche group that prefers cash‑like privacy, simplicity and robustness. The authors argue that a central‑bank digital currency should benchmark itself against cash, rather than only prioritising speed, to achieve success.
© European Central Bank, 2025.
Summary derived from the ECB website (https://www.ecb.europa.eu ).
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