Estonia’s central bank is recommending citizens keep a week’s worth of cash on hand due to potential payment service disruptions and system failures.
Estonia Joins Trend of Encouraging Cash Reserves
Following a similar recommendation in Sweden, Estonia’s central bank advises citizens to prepare a cash reserve to cover potential interruptions in payment services, transactional system failures, or other unforeseen events.
The Bank of Estonia recommends families hold a weekly supply of cash at home.
Risks Linked to Global Payment Networks
The advice stems primarily from risks associated with the operation of American card payment networks – Visa and Mastercard – which have a global reach and on which many EU countries, including Estonia, are dependent.
Preparation for Digital Euro
Holding cash at home is also considered a prudent measure to prepare for the planned introduction of a digital euro within the EU, according to Rainer Olt, head of Eesti Pank’s payment and settlement systems department.
Digital Euro Timeline
The European Central Bank suggests a digital euro, intended to reduce reliance on foreign systems, could be introduced by the end of the decade, potentially between 2029-2030, following initial testing.
Declining Cash Usage in Estonia
A survey conducted by the National Bank of Estonia at the end of last year indicates a year-on-year decline in the use of traditional cash, with only 8% of Estonians currently preferring this payment method.
