Crises prove cash remains ultimate payment backstop, Ríos says
Euro cash proved indispensable during the 2024 Valencia floods and the 2025 Iberian blackout, Banco de España Director General Alberto Ríos said in Brussels. The central bank is adapting transport cost sharing and processing infrastructure to sustain the cash network.
Floods, blackouts and mobile branches
Digitalization has reduced euro banknote production volumes, raising unit costs across the Eurosystem and forcing central banks to rethink their production footprint.
Yet physical cash remains the essential payment backstop when electronic systems fail.
In October 2024, severe flooding in Valencia destroyed banking facilities and local infrastructure.
Six months later, in April 2025, a wide blackout halted electricity and digital payment channels across the Iberian Peninsula.
During both disruptions, Banco de España coordinated with commercial banks and cash-in-transit firms to deploy mobile banking units and replace damaged notes.
Alberto Ríos noted: “Different causes, different impacts, but the same lesson: cash remains the ultimate payment backstop.”
Two tracks for distribution reform
Declining cash usage creates financial strains for cash-in-transit companies, threatening the long-term viability of private distribution networks.
To counter this, Banco de España is implementing two reforms.
First, the central bank will rebalance transport costs currently carried by commercial lenders for banknote issuance.
Second, it plans to shorten cash processing cycles by integrating cash-in-transit infrastructure directly into the upcoming transformation of its Barcelona branch.
Insurance has a price tag
Shifting transport costs to the central bank admits that private logistics cannot sustain cash networks alone.
Treating cash as crisis insurance rather than a standard commercial product makes this public support necessary.
Without such fiscal backing, central banks risk losing the operational capacity needed for systemic emergencies.