The Germans will start 2024 with a few extra billion stuffed between the sofa cushions. No, not Euros, but good old Deutsche Marks.Thank you for reading this post, don't forget to subscribe!
People in Germany are famous for their fondness for cash, but more than two decades after the introduction of the euro, millions of Deutsche Mark (DM) coins and colorful bills are languishing in socks drawers or lost in sewer drains.
While some of this old money is held by nostalgic Germans or collectors, another portion may have been treasured as souvenirs to be taken home by tourists over the years. Experts say that some currencies are still held by countries that once used them as reserve currencies. No one really knows for sure. Although these symbols can no longer be used, they can be traded in euros.
How much is there?
The fact that Marx ceased to be legal tender in early 2002 did not make much difference to his return home. Hard currency unaccounted for approximately 7.5% of the 162.3 billion marks in circulation at that time. More than half of the coins by value have not returned home in the last two decades.
At the end of 2023, 12.24 billion marks were still in circulation, according to the Bundesbank, the country’s central bank. Breaking this down, we get 5.68 billion marks in bills and 6.56 billion marks in coins. In total they are worth approximately €6.26 billion ($6.92 billion).
Even for Europe’s largest economy that’s a significant amount of money lying idle, especially at a time when the government is looking to fund infrastructure projects like a green energy transition and rail upgrades that could boost its economic growth. Are important for the future.
Cash is expensive: it must be printed, transported, kept safe, counted and constantly reprinted Image: Jürgen Fromm / Picture Coalition / Augenclick / Firo Sportfoto
Slowly but surely the sign of coming home
Even though Deutsche Marks is “slowly” finding its way back into the Bundesbank, the bank is not worried about missing cash. Anyone with old coins or bills can exchange them for any amount at a central bank branch. And in fact there are quite a few exchanges every year.
The exchange rate is fixed at €1 to 1.95583 Deutsche Marks, and the service is free.
Last year, more than 90,000 people visited the central bank, and more than 53 million points were handed over in exchange for €27 million, an increase on the previous year. Two-thirds of the total value was of banknotes, one-third of coins. Most came from Bavaria, followed by North Rhine-Westphalia and Baden-Württemberg.
Importantly, there are no plans to discontinue this service, the bank has assured. Germany is a bit of an outlier, as only five other eurozone countries have no deadline for handing in their old currencies: Austria, Ireland, Estonia, Latvia and Lithuania.
Other countries that adopted the euro offered only a limited window for exchanging money. In France, any franc hoarders had until 31 March 2008 at the most to hand them in. Greece was a little more lenient and gave everyone until March 2012 to exchange their drachmas. Now anyone who finds old currency under there loose floorboards is out of luck.
Will the digital euro signal the end of cash in Europe?
Germans continue to pay in cash
Fortunately, for the Germans, there is no rush. And maybe some of them still can’t let go. Today “Cash Only!” It is not a normal thing to see. Signs in restaurants and kiosks.
In 2021, despite the increase in cashless payments, cash was the most used means for daily payments in Germany, according to the latest study conducted by the market research institute Forsa for the Bundesbank.
Although cash payments have declined sharply since 2017, researchers concluded that cash was still used for 58% of goods and services purchased. Measured in turnover, cash payments were only 30%, as large purchases and online shopping are often paid for through other means.
The average person carries €100 in their wallet. Forsa found that for one-third of people, cash generally remains the preferred means of payment.
Cash can be used anywhere, anytime, even in emergencies without electricity or highspeed cables. Image: AKG-Images/Picture Alliance
As far as old Deutsche marks are concerned, Bundesbank board member Burkhard Balz expects more to come soon, especially with a major generational change. “When cleaning inherited houses and apartments, German traces are likely to be found,” he told the dpa news agency in December.
Yet many may wonder whether it is worth taking a handful of coins to the bank and putting them back in the jar. There they would wait to be discovered again, while confusing the bankers as to their whereabouts.
For those trails that end back at the central bank, this is the end of the road. The notes are minted on site.
The coins are sorted and sent to one of five German mints where they are struck. The metal then goes to scrap recyclers who melt it down for other uses. Maybe it’s not a happy ending, but a way to make some extra cash during tough times.
Editing: Ashutosh Pandey