Circulation of euro banknotes


The banknotes in your wallet

Out of the seven euro banknote denominations, low and medium-value notes are mostly used for day-to-day payments. They are usually issued via cash dispensers. People can hold large sums in cash using the high denominations. They serve mainly as a store of value, but are also used to purchase expensive items.

Information on the circulation figures of the seven banknote denominations is available in the statistics section.

Outside the euro area

Euro banknotes on the move

Euro banknotes are not only used by those who live in the euro area. The euro is an international currency, so some euro banknotes end up and remain outside the area.

It is estimated that, in terms of value, between 20% and 25% of the euro banknotes in circulation are held by people outside the euro area, mainly in regions neighbouring the euro area. The demand for euro banknotes abroad rose steeply when the financial turmoil escalated in October 2008. Demand grew noticeably in non-EU countries in eastern Europe, where the national currencies depreciated against the euro. These euro banknotes remain in circulation, suggesting that they are being kept by non-euro area residents.

Cash ‘cycle’

The flow of money

Banknotes follow a specific path through the economy. Commercial banks order them from central banks and then issue them via cash dispensers. People spend them in shops, markets and other places and the banknotes are in turn deposited by retailers and others at their banks. The banks and other cash handlers then either send them back to their respective central bank, or recirculate the banknotes after having checked them for authenticity and fitness for circulation.

The organisation of the cash supply chain varies from country to country and depends on, e.g.

  • the structure of the central bank, including its branch network,
  • the banks and their branch networks,
  • the legal regime,
  • the payment habits of the public,
  • the infrastructure of cash-in-transit companies operating on the market, and
  • the geography of each country, its history and traditions.

For these reasons, a "one-size-fits-all" model for national cash cycles in the euro area is not feasible.

Despite these differences, the Eurosystem continues to aim for a greater convergence of the cash services offered by euro area central banks. Stakeholders, such as commercial banks, cash-in-transit companies and other cash handlers, at both national and European level are consulted. Increased harmonisation and integration will allow stakeholders to obtain greater benefits from the single currency.

For further information see the ECB’s Annual reports.

Sorting and destruction

Good or no good?

Banknotes have to be genuine and of high quality if people are to have confidence in them. So the euro area national central banks (NCBs) check the notes to ensure that they are authentic and not too damaged or dirty before issuing them.

The NCBs have fully automated banknote processing machines, which check the banknotes they receive. These machines sort the notes to maintain high standards of quality.