ECB assesses cash’s environmental footprint, sees room for improvement

The European Central Bank looked at the environmental impact of using banknotes and found 16 environmental impact categories. As with all cryptocurrencies, energy efficiency was a major concern.

Banknotes remain the most common form of payment at points of sale in the eurozone. The use of cash requires a sophisticated physical infrastructure for production, distribution and eventual retirement.

ATM energy use contributed the most to the environmental footprint of banknotes at 37%, followed by transportation (35%). The rest was in processing, papermaking, proofing and many other stages. The ECB started efforts to reduce the environmental impact of banknotes in 2004. According to the ECB:

“For example, the energy consumption of ATMs has decreased by 35 percent between 2004 and 2019, even though the number of ATMs has increased significantly. We are also looking to further reduce our transport impact.

Using the Product Environment Footprint (PEF) method, the European Commission concluded that each citizen in the Eurozone spends an average of 101 micropoints equivalent to driving a car 8 kilometers (4.6 miles). The total average impact of an EU citizen was just under 1 million micropoints, which is equivalent to driving a car twice on Earth. Those calculations are based on 2019 data.

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Those statistics compare favorably with Bitcoin mining, the impact of which researchers were able to measure in millions of swimming pools filled with water. However, crypto mining is becoming more efficient, and the opportunity for crypto mining to reduce its environmental impact is growing rapidly.

Did you know that the use of euro banknotes has a very low environmental impact?

Our research shows that the annual cost of using euro banknotes is the same as driving 8 kilometers in a car.

Find out more pic.twitter.com/YDmBnl4S4x

— European Central Bank (@ecb) December 11, 2023

Also, crypto miners may have some unique advantages if they choose to pursue them. Mining facilities can easily be installed at fossil production sites to utilize production by-products. Crypto mines have even been set up on landfills to extract methane, and miners can stabilize power grids.

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