In Europe, the environmental footprint of banknotes is minuscule compared to crypto’s, but crypto has advantages of its own.
The European Central Bank (ECB) has taken a look at the environmental impact of using banknotes and discovered 16 environmental impact categories. As with cryptocurrency, energy efficiency was a major issue.
Banknotes continue to be the most common form of payment at points of sale in the eurozone. The use of cash requires an elaborate physical infrastructure for its production, distribution and eventual retirement.
Energy use by ATMs was the biggest contributor to banknotes’ environmental footprint at 37%, followed by transportation (35%). The remainder was down to processing, paper manufacturing, authentication and many other steps. The ECB began efforts to reduce the environmental impact of banknotes in 2004. According to the ECB report: