The Future of Small Change: A Cashless Shift

The conversation surrounding the potential abolition of one and two-cent coins in Germany reflects broader trends in cashless payments. The Bundesbank, alongside various associations, argues that these coins are unpopular and costly to produce, with one-cent coins costing approximately 1.65 cents to mint.

While the public's sentiment leans towards eliminating these coins, concerns about national measures persist. Some EU countries have already adopted rounding rules, successfully reducing their reliance on small change.

Despite the popularity of cash in Germany, particularly among older generations, the younger demographic is increasingly favoring digital payment methods. The Bundesbank's proposal aims to create a more sustainable and efficient payment system, reducing costs associated with production and transport.

As discussions continue, the future of small denominations hangs in the balance, paralleling a global shift towards digital currencies, with the European Central Bank also exploring options for a digital euro.