Currency Circulation System Related Agencies Council
2024 Second Half Regular Meeting
As cash usage declines, the operating conditions of ATM operators are deteriorating, prompting calls for measures such as joint operation of commercial banks' ATMs with non-financial ATM operators.
On the 8th, the Bank of Korea (BOK) held a regular meeting of the Currency Circulation System Related Institutions Council at its headquarters in Jung-gu, Seoul, to discuss recent domestic currency supply and demand trends and ways to improve the management environment of institutions participating in the domestic currency circulation system, the BOK announced on the 12th.
At the meeting, measures to improve the management conditions of institutions participating in the currency circulation system, whose operating environment has worsened due to the recent decline in cash usage, were discussed.
Participants mentioned that non-financial ATM operators are facing increasing management difficulties due to a decrease in ATM usage and rising operating costs caused by wage and price increases. To improve the operating conditions of these operators, participants proposed a plan for commercial banks to jointly operate some of their ATMs in partnership with non-financial ATM operators.
However, some attendees expressed concerns that expanding partnerships with non-financial ATM operators could lead to a reduction in the number of ATMs operated by commercial banks.
Other participants noted that while cash usage by the public is expected to steadily decline in the short term, it is likely to stabilize at a certain level in the long term. They suggested that even with the increased use of non-cash payment methods, there remains a fixed demand group, such as the elderly, who prefer using cash.
The meeting also exchanged views on recent currency supply and demand trends. Participants mainly cited the expansion of bank demand due to the decline in market interest rates, which increased currency demand for precautionary and store-of-value purposes, as well as the rise in foreign tourists.
Kim Gi-won, Director of the Banknote Issuance Department and chairman of the council, emphasized, "As cash usage declines, the operating conditions of institutions participating in the currency circulation system are deteriorating, and concerns about the weakening of the currency circulation system, including reduced public access to cash, are growing. Since once the currency circulation system is damaged, restoring it can require significant costs and efforts, participating institutions must pay more attention and effort to ensure the stable maintenance of the currency circulation system."
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