Digital is reshaping cash cycles and physical currency demand globally

Use of banknotes in 2025 is only 80% what it was in 2019, and further reductions are forecast, according to the latest research from Smithers, the global authority on the security printing industry.

The latest Smithers Market Report – The Lifecycle of Banknotes to 2030 – discusses the emergence of new hybrid cash ecosystems where digital and physical forms coexist. Digital payment options include contactless cards, virtual wallets on smart devices, and secure QR code platforms. In response, high-security printers are examining how to add a physical-digital link onto banknotes, with trials of 2D data matrix codes, extending into other alternative dynamic visual markings and the use of RFID or NFC tags on higher denominations.

Central bank digital currencies (CBDCs) are also being introduced to complement physical banknotes, giving authorities a direct stake in a dimension previously dominated by volatile, unregulated cryptocurrencies. This will require re-evaluation of national ATM networks, cash logistics, and note issuance policies.

As part of their implementation, central banks will have to develop new strategies based on the preference for physical cash in different regions. This will include the establishment of strategic reserves of printed currency to counter the risk of cyberattacks disrupting digital payment systems.

With fewer cash transactions, individual banknotes will remain in circulation for longer, especially as more countries move from conventional cotton paper to polymer banknotes. This will require innovation with multi-layer security features designed into the banknote substrate, not layered afterward, to give better integration and longer service life; as well as wider use of dynamic overt authentication features.

Issuing authorities are under pressure to make banknote printing and disposal more sustainable. Environmental requirements – such as ISO 14001 certification – are increasingly common for new note commissions. This is pushing further adoption of polymer substrates, and other technologies to improve durability, keeping individual banknotes in circulation for longer. Central banks are also looking to establish secure recycling systems for banknotes once they have been withdrawn from circulation, with the possibility of developing circular economy loops for some materials.

Changes in how cash is issued and handled are being reflected in the commercial landscape for high security printing – with a push for more integrated full-lifecycle solutions, including service support.

The impact of these market and technology trends across the next five years is analysed in The Lifecycle of Banknotes to 2030 – available to purchase now from Smithers, priced $6,750 (€6.350, £5,475).