All signs point towards the necessity of a new banknote in Hungary. The current economic crisis indicates that a new HUF 50,000 banknote is coming. Although in times like these larger banknotes usually appear, a lot has changed since the last introduction of a new bill.
Is it time?
The last time when Hungary saw the introduction of a new banknote was more than 20 years ago in 2001. The HUF 20,000 bill was introduced in similar conditions as we have nowadays. Today, we have approximately 8,300 billion cash in circulation, compared to the early 2000s when this number was just around 1,000 billion. This is an indicator of inflation and a new bill could help reduce this number. The introduction of the HUF 20,000 bill was justified by the 70 percent GDP growth and the growing use of cash at the time. This was a time when the HUF 10,000 bill had been introduced only four years prior in 1997.
The HUF 50,000 banknote seems to be the logical next step — according to 24.hu. However, since the 2000s a lot of change has happened in the world. It is true that if we take the inflation rate of 1990 as a base number by 2001 inflation had increased sevenfold, while by 2021 it had increased by fourteenfold. The doubling of the inflation rate should announce a new era in the world of banknotes, but it will most likely not happen.
Today, regular shopping mostly requires at least HUF 10,000 (EUR 25). A larger weekend shopping is at least around HUF 40,000 (EUR 100). With these numbers in mind, we can assume that a larger HUF 50,000 banknote would make paying a lot easier. However, in the past twenty years, credit card usage became widespread and most people do not keep large amounts of cash with themselves if any at all. When it comes to paying greater sums of money people will just restore to using non-physical alternatives.
The Hungarian National Bank (MNB) says that it is unnecessary to change the current cash structure of the country. The current instant and electronic payment systems are adequate, therefore the time of a new bill might truly be here. However, it would be useless to introduce it.
Even if the situation worsens, new banknotes might not appear at all in the future. Earnestly, the time of cash has passed, even if most people still use it. It is indisputable that cash will remain with us for the foreseeable future, but its development of it is not necessary anymore. Phasing out this payment method will not happen overnight, it is clear though that cash will slowly but surely disappear from our lives eventually.
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