This problem has probably been exacerbated by the fact the the $500 euro note has not been issued since 27 April 2019[1]. I wonder if making storing euros in cash 2.5 times harder (500 versus 200 euro notes) was part of the reason the 500 euro was retired.
[Edit] The legal storing of cash. The stated reason was the criminal use of cash.
According to that same article, the reason for retiring the note was because the people who benefited the most from its existence are criminals, who need to do their business in cash -- the fewer notes, the easier for them. That includes storage, I guess.
Still, I'm personally not in the eurozone, but in general terms for the end user high-denomination notes are not very useful unless you're gonna store them under your bed (and governments don't like this, they'd rather everybody be bancarized). Actually using them to buy things is a pain, since most businesses won't accept them. Having one in your wallet is a problem that you have to take care of, instead of just money
>
According to that same article, the reason for retiring the note was because the people who benefited the most from its existence are criminals, who need to do their business in cash -- the fewer notes, the easier for them.
> Actually using them to buy things is a pain, since most businesses won't accept them.
For me it always went smoothly when buying something that exceeded the value of the high note. Your experience may differ if you buy a roll in the bakery.
The same people who benefit from encryption if govts are to be believed. If cash keeps being as unwieldy as it has become, a $100 note today is worth about what a $10 note was worth in 1920, people will just stop using govt back cash and use gold or art instead. Monero looks like it's the first large scale crypto to get inflation and anonymity at least partly right.
> According to that same article, the reason for retiring the note was because the people who benefited the most from its existence are criminals, who need to do their business in cash -- the fewer notes, the easier for them. That includes storage, I guess.
And then, they tell bitcoiners they are crazy for denouncing the overreach of central banks.
Interesting, I don't see any mention retiring the note because of criminal use or anything about the 500 note at all. Is Bloomberb A/B testing the content of articles now? Would not be surprised, but it would be a disturbing trend.
This problem has probably been exacerbated by the fact the the $500 euro note has not been issued since 27 April 2019
The United States used to print $100,000 notes. They were only available to banks for moving from bank to bank, I believe, and so were useful for reducing the number of notes that needed to be stored by banks, while keeping them out of the hands of criminals.
The US also had lower denomination bills like the $500 and $1000 until 1969. They were not in much use then but I think that they could have useful legal uses today considering all of the inflation that happened since 1969. The $500 now would be about like $75 in the 1960's.
True. But it is nice to have large bills when buying something that costs a lot, like a used car. I recently did that in the US and if I had some $500 or $1000 bill things would have went a bit smoother at that nervous time in the transaction when you are handing over to a person a big chunk of money.
I used one at Real, think I bought like 30 Euros worth of stuff. They did look at it for a bit, but accepted it without complaint. Amazing compared to a 50 pound note in England :D
the real reason why the 500 euro bill has been revoked was that for storing physical money (for banks, in those quantities) would become more expensive in order for the ECB to lower the interest/deposit rate.
next thing will be 200 euro bills revoked, then the base rate can go down to around -1%.
I mean, there's an easier way to set a negative interest rate on cash. Periodically select X% of the circulating serial numbers and declare that they're no longer valid currency.
In effect this makes X% of cash "burn off" every period, and allows the monetary authority to set any negative effective interest rate that they want.
This is by no means an endorsement of negative rates. But if you're going to go down that road, it's a better scheme than just trying to make holding cash too much of a pain in the ass.
Indeed it was. Even now the 200 Euro note is the best for laundering and transportation since it's the highest value bill in common circulation (per Fed employee)
Well, I am no expert but let me play the futurist here. After they killed the 200 Euro note it is going to be the 100 Euro note that is going to be used by those damn criminals!
It is in essence part of the same eradicating rights movement that is fighting against anonymity in the internet. "Hey look, there are some criminals benefiting from it so let's kill it."
The really big criminals and tax evaders will ever find a way around this kind of restriction.
This is useful to control the smaller fish. But, also, the cynic in me thinks that the big sharks have lots of friends in high places and politics and public administration and that those restrictions were never intended to catch them on the first place.
If this was an actual problem, couldn't the ECB issue (eg) €1 million bearer bonds to the banks that have to store cash (these notes wouldn't need to go into general circulation). In fact, why don't they do that?
The short answer is that they don't want to make it easy for banks to hold cash; they want the banks to loan the money out (ideally) or deposit it with the European Central Bank where they will have to pay for the privilege in the form of negative interest rates (which is what the banks are trying to avoid by holding the cash).
€500 used to be called Bin Laden. Obviously everyone eventually asks: why? Because everyone knows it exists,yet nobody has ever seen one. For the absolutely majority of Europeans it's a pretty useless note.
The crazy thing is that Germany is killing their own banks. They refuse to run fiscal deficits while at the same time they criticize the ECB for lowering rates and hurting the German Saver, when the German Saver is who would benefit if they decided tomorrow to run deficits for the next 10 years.
Germany is obsessed with keeping the value of the Euro low to maximize their exports. That's one of the reasons they've been pushing austerity after the economic crisis, as keeping countries like Greece, Portugal etc. in a rut depreciates the currency (the other reason is a weird sense that countries in debt have committed some moral failing and should be punished).
Their trade surplus has been a subject of intense criticism by economists and other EU states, but Germany calls the shots in the eurozone economy.
In Germany's defense, they never asked for the Euro, it was more or less forced on them as the price for France not pitching a fit about German reunification. Essentially, the rest of the Eurozone is running on Deutschmarks, and calling it the "Euro" instead of the "Deutschmark" is just a face-saving measure. Germany, unlike most other countries in the Eurozone, could announce tomorrow that they were leaving the Euro, and there would be no run on the banks.
There might, though, be a run TO the banks, to deposit your Euros in time to get them magically changed into Deutschmarks.
So, Germany acts like they run the Eurozone, because the Euro runs on Germany's economic status.
Now, why Italy, Greece, etc. continue to remain inside a currency zone that is not appropriately valued for them, is a different question. I would not be surprised that, if the League ever gets control of the Italian government, they will withdraw. But until then, the Mediterranean countries are handicapping their own economic competitiveness voluntarily, it's not as if it's Germany's fault, since it wasn't Germany's idea.
That's nonsense. The reason for low interest rates is so that Italy won't collapse. It's widely hated in Germany as bank accounts have basically zero interest nowadays.
> ... when the German Saver is who would benefit if they decided tomorrow to run deficits for the next 10 years.
The German Saver knows better than most that inflation destroys savings.
Inflation benefits debtors by allowing them to pay back their loans in depreciated currency. Germany isn't exactly a nation of debtors, although most of Europe is.
This is a looming political issue that's only just beginning.
>The German Saver knows better than most that inflation destroys savings.
Yeah this is not the outcome Germany or the EU needs to worry about. It's experiencing Japanese deflation for 20 years.
>This is a looming political issue that's only just beginning.
Yes there's been plenty of hard money cranks that have said this for 10 years since the Great Financial Crisis in the US. Zero Hedge, gold bugs, hedge fund managers, etc have all been sounding the alarm about "money printing" and the deficit. There's no inflation in sight.
Exactly. It seems that we have unfortunately fixated on over-protecting winners, those that can take their rewards and reinvest them in something that is increasingly reducing to a financial scheme, debt in fact; over-protected, “low risk” and ethically enshrined.
Which is metaphorically like rewarding couch-potatoes.
Rather that letting the winners enjoy their success, while wiping it out in the long term if it’s not funneled towards material investments that can benefit also the “non winners”, with jobs and quality of life improvement.
Seems like the narcissistic Randians are at the steering wheel, and no stepping down in sight
Running deficits is not the same as inflation. There's no place for Germans to save, and its because the German government won't borrow. A sensible policy would be for the German government to borrow and invest heavily in infrastructure. Instead Germany has opted for policies that will cause it to teeter on the edge of recession for decades.
I'd normally agree but I think I just have more faith in Keysnian economics. You basically pay for today with the future. If you no longer can afford the future, you still have the infrastructure or asset that exists. Normally it isn't a 0 valued item (unless we're talking bankrupt securities, worthless commodities, or education) so even in an economic crisis, there is something tangible that came be used as collateral.
Savers are bad for the economy at large though because they don't invest in high risk businesses, but rather in low risk assets (RE, bonds, etc) that do nothing for no one. They're like scrooge mcduck swimming in their pile of gold.
What good is the EU if its wealthier members are unwilling to subsidize the poorer ones? Germans want the benefits of federation without the drawbacks.
Be careful what you wish for. I agree with Stieglitz that the Troika has historically not chosen the best path for crisis countries by implementing austerity. My fear with using Fiscal Policy and running deficits is that it is hard for a politician to win a campaign fighting for austerity if and when the debt binge becomes to great. From my own understanding, that is why monetary policy is strongly preferred because it’s easier to roll back but Europe is at their end of Monetary policy. I wish I understood MMT better, it’s something discussed in the circles of parliament and congress but I don’t think the average joe is aware.
This is absurd in the context of Germany. They have a fetish with "fiscal responsibility". It'd be the natural inclination of every politician to cut back on deficits (and I imagine within a few years there'd be pressure to).
Germany is a country with a broken military and infrastructure. They should spend money on that. They should cut taxes for workers. There's plenty of shit for Germany to spend money on, and it would cause yields to finally rise.
The ECB has no choice because rich countries refuse to spend money.
Very generally, my gripe with MMT is maybe it could work if well run. I'm not convinced but let's say it's possible. Next step, can we trust politicions to run the program effectively? I suspect they would always try to squeeze more out than practical that would lead to issues... And that's if it would work in the first place.
I'd like to see some countries try it and prove/disprove, just not mine first.
This kind of talk is irresponsible. Debt isn't free, you pay interest on it, you children might have to pay interest on it. Debt introduces systemic fragility. If the only way to grow your economy is rising public debt, something is fishy.
Germany is obsesed with having a trade surplus in good & services. Every Euro that ends up in a bank is one less euro that might be used to buy foreign goods. So they repress spending and the money having no where else to go ends up sitting in a vault or paying for US securities.
Negative interest rates are long time lethal to financial institutions such as banks and insurance companies. Hoarding printed paper is just a hilarious side effect, but the reality is that under negative rates the financial institutions are, at best, delaying their inevitable bankruptcy.
I don't see why Germany doesn't handle it the same way as the Bank of England where the chief cashier signs special notes called 'Giants' worth £1,000,000 and 'Titans' worth £100,000,000. These are obviously only used for inter-bank transactions.
The short answer is that they don't want to make it easy for banks to hold cash; they want the banks to loan the money out (ideally) or deposit it with the European Central Bank where they will have to pay for the privilege in the form of negative interest rates (which is what the banks are trying to avoid by holding the cash).
Why do they need paper money anyway? Is there something more legitimate about a piece of paper with many 0s on it vs redundant electronic storage of record?
They don’t need the pile of cash, and are free to burn it if they want and just write down in an excel sheet: “today we burned 2 billion euros”, now the question is if you’re willing to have your salary paid out in a digital recognition that you now own a part of that burnt cash, because you feel comfortable that others would allow you to pay using those IOU’s of no longer existing cash.
If not, then the current system where the digital records refer to actual cash still needs there to be actual cash somewhere. Normally you’d have it in the national bank, but since they started charging it’s better to stockpile paper.
Can someone explain to me why central banks find it so hard to create inflation? It seems to me that the difficult direction should be convincing people that your currency is worth something. Making your currency lose value should be easy, shouldn't it? If Google wanted to tank their share price they would have no problems.
Usually, fear. People hoard cash when they're afraid of a crash. When a crash happens, money becomes more valuable, so they can buy things more cheaply. People who anticipate a crash risk provoking one by removing money from the supply.
So central banks try to counter that: "Your money will be worth less in the future, so spend it now. Or make an investment that will produce returns greater than the rate of inflation." So they spend their money, creating demand, and jobs materialize (hopefully) to fill that demand.
For the last decade-plus we've had a combination of anticipation of disaster, and banks flooding the system with cash to assuage that fear. That's like pressing both the accelerator and the brake as hard as you can -- you don't go anywhere until suddenly something gives, and then the entire thing goes to hell in a handbasket right quick.
When? If I knew that, I'd be rich. The general advice is that the market can remain irrational longer than you can remain solvent.
Central banks are creating inflation, problem is it's in all the wrong places - e.g. asset inflation - instead of a rising CPI. (There is a bit of a debate taking place in central banking circles at the moment about whether CPI is an adequately measure, and whether it should better reflect things like rent increases; FT's Alphaville blog has had a number of interesting articles on the topic over the past week).
Inflation isn't just about money supply (no matter what certain people on the internet tell you), it's about money velocity. If the central bank prints a hundred billion dollars but it immediately gets stashed in vaults or under people's beds or in international tax havens, it might as well not exist and there's no inflation. The "pushing rope" metaphor for inability to create inflation is a good one.
I think liquidity might have been the word you were looking for, but your example was not an increase in money supply. Creating money and storing it in a bank account increases supply. Creating money and adding it to a banks reserves increases supply. Withdrawing cash and permanently storing it somewhere decreases supply. Increasing reserve requirements decreases supply. If the amount held in reserve goes up because a bank doesn’t want to loan, or charges too much for it, that decreases supply.
Inflation is entirely about the supply and demand for money. You were just calculating it wrong.
There are many factors and others have pointed out some of them. Here's another one:
The dollar's relative value to goods and services isn't rising... and it's because of countries like China that make goods and services for so few dollars.
Think about it - I can go to oldnavy.com and buy a shirt for $9. That shirt was made literally on the other side of the world, shipped, marketed, sold, packaged and delivered for $9.
The disparity in incomes and environmental protections between the U.S. and other countries makes it very difficult to trigger price inflation. And things just keep getting cheaper. Prices don't rise when supply of goods and services keeps pace with the demand from dollars.
Even if they were to magically slice 20% of the share price, it would immediately start a buying rally. Anything that would have a permanent effect on the share price would probably have to threaten the very existence of the company.
I heard an interesting podcast a little while back that conjectured the typical way to get inflation going (so-called "helicopter money" to the spending population) is far and away the least predictable way to do things. Specifically, the speaker argued that compared to large banks and investing entities, people might do things like pay off debt or save the cash for a rainy day... neither of which are inflationary.
That isn't to say that handing out wads of cash wouldn't eventually lead to inflation, but that the systemic lag and second-/third-order effects might make the process so unpredictable that by the time inflation begins to tick up, the central bank would have no way to provide effective control.
I don't know if I'd agree its something you can't make useful, but trying to use inflation as a means of macroeconomic policy - rather than an indicator of the success/health of the overall economy - seems utterly dangerous.
They don't find it hard, because it's trivial: just restrict imports (i.e. available inventory). If there are less things to buy, inflation will rise as people "compete" to buy whatever is available. When you hit your target inflation number, relax the restriction on imports to reduce the inflation. Season to taste.
This policy likely has 2nd and 3rd order effects, as it will hurt other countries, but that's a simple strategy to artificially create inflation in CPI items that's fail-proof in execution. Prices will go up.
Restricting imports is much better than just giving people money, because they can use the extra money you give them on things like paying down their debt, or just put it in the bank and save it. Instead, you want to target the things they already buy and make those things scarce, so their price goes up (the definition of "inflation"). Food, fuel, and electricity are the easiest to monkey with because people are always buying them, and don't have much of a choice.
(If you can't restrict imports (or don't want to), you can simply print money to buy up the local inventory yourself and trash it/warehouse it/export it out of the country/set it on fire. The effect is the same: less inventory for the general population is available, causing the price of whatever is left to go up.)
It's not difficult to create inflation, if that's your objective, though it's not quite as simple as increasing the money supply by a fixed percentage and is obviously politically difficult.
It's much more difficult to create economic growth by persuading banks to lend more.
Or Zimbabwe or Argentina even ... but I think these extremes are absurd. They are blunders. What we are talking about here is why EU isn’t taking prudent steps to provoke growth, and that’s all down to keeping certain dominant nationa happy.
what simple mistake did the weimar republic do that caused a hyperinflation? I thought it was primarily caused by a massive reduction in the supply of goods following the versaille treaty without a corresponding reduction in monetary supply. At that point there really wasn't a lot the government could do to stop it.
Zimbabwe faced similar problems after disowning their most productive agricultural providers, reducing supply.
Because central banks don't direct how the money is spent. The central bank puts money into the system but it's up to fiscal policy makers to determine flows -- in the US laws lead to inflation in asset prices.
Well in Germany's case they believe the economic conditions (inflation) were a cause of Hitler's rise to power, and are understandably extremely skittish about triggering similar conditions
It's not hard doing it in an absolute sense. E.g. drop a bomb on yourself. It's hard doing it without messing everything else so much as to not be worth it.
This is a sure sign that government paper is crowding out private investment and destroying the eurozone economy. This is solvable through higher inflation.
>Surely the banks have to declare how much cash they're holding. Couldn't they just be forced to pay negative interest on that?
Could they? With appropriate legislation/government action, of course.
>..or give the money to someone else for a while so they can do something with it.
You are talking about forcing them to invest the money. And what happens if that person cannot pay back what was lent to them? If there were any available investments that were safe enough, the banks would be tripping over each other to make that investment, believe me. Hoarding money costs the bank money. Investing it is not only free, but it turns their money into more money. If you were to force them to make unsafe investments, then that risk is essentially passed onto the people who deposited their money in that bank, in the form of potentially not being able to withdraw their money.
> but is there a paper dollar corresponding to every dollar I have in my bank account?
No.
> I always assumed that some of the currency issued by governments was exclusively digital.
They aren't even really issues by the government for the most part. While government policy shapes the framework in which money is created, much is created by private lending.
The accounting is tied to the Federal Reserve by mere bookkeeping for the bulk of it. If the banks are short on cash, they have the fed just print it for them.
Readit News
[Edit] The legal storing of cash. The stated reason was the criminal use of cash.
[1]https://en.wikipedia.org/wiki/500_euro_note
Still, I'm personally not in the eurozone, but in general terms for the end user high-denomination notes are not very useful unless you're gonna store them under your bed (and governments don't like this, they'd rather everybody be bancarized). Actually using them to buy things is a pain, since most businesses won't accept them. Having one in your wallet is a problem that you have to take care of, instead of just money
This is what they want the citizens to believe.
For me it always went smoothly when buying something that exceeded the value of the high note. Your experience may differ if you buy a roll in the bakery.
And then, they tell bitcoiners they are crazy for denouncing the overreach of central banks.
The United States used to print $100,000 notes. They were only available to banks for moving from bank to bank, I believe, and so were useful for reducing the number of notes that needed to be stored by banks, while keeping them out of the hands of criminals.
So they were discontinued when they couldn't find any non-criminal bankers?
Once electronic settlement became common, these bills became obsolete.
next thing will be 200 euro bills revoked, then the base rate can go down to around -1%.
In effect this makes X% of cash "burn off" every period, and allows the monetary authority to set any negative effective interest rate that they want.
This is by no means an endorsement of negative rates. But if you're going to go down that road, it's a better scheme than just trying to make holding cash too much of a pain in the ass.
It is in essence part of the same eradicating rights movement that is fighting against anonymity in the internet. "Hey look, there are some criminals benefiting from it so let's kill it."
Their trade surplus has been a subject of intense criticism by economists and other EU states, but Germany calls the shots in the eurozone economy.
https://www.economist.com/leaders/2017/07/08/why-germanys-cu...
There might, though, be a run TO the banks, to deposit your Euros in time to get them magically changed into Deutschmarks.
So, Germany acts like they run the Eurozone, because the Euro runs on Germany's economic status.
Now, why Italy, Greece, etc. continue to remain inside a currency zone that is not appropriately valued for them, is a different question. I would not be surprised that, if the League ever gets control of the Italian government, they will withdraw. But until then, the Mediterranean countries are handicapping their own economic competitiveness voluntarily, it's not as if it's Germany's fault, since it wasn't Germany's idea.
The German Saver knows better than most that inflation destroys savings.
Inflation benefits debtors by allowing them to pay back their loans in depreciated currency. Germany isn't exactly a nation of debtors, although most of Europe is.
This is a looming political issue that's only just beginning.
Yeah this is not the outcome Germany or the EU needs to worry about. It's experiencing Japanese deflation for 20 years.
>This is a looming political issue that's only just beginning.
Yes there's been plenty of hard money cranks that have said this for 10 years since the Great Financial Crisis in the US. Zero Hedge, gold bugs, hedge fund managers, etc have all been sounding the alarm about "money printing" and the deficit. There's no inflation in sight.
Which is metaphorically like rewarding couch-potatoes.
Rather that letting the winners enjoy their success, while wiping it out in the long term if it’s not funneled towards material investments that can benefit also the “non winners”, with jobs and quality of life improvement.
Seems like the narcissistic Randians are at the steering wheel, and no stepping down in sight
Germany is a country with a broken military and infrastructure. They should spend money on that. They should cut taxes for workers. There's plenty of shit for Germany to spend money on, and it would cause yields to finally rise.
The ECB has no choice because rich countries refuse to spend money.
I'd like to see some countries try it and prove/disprove, just not mine first.
I genuinely wonder why you believe that? Everything points to the status quo.
Germany has a debt brake law (Schuldenbremse) that limits structural net borrowing to 0.35% of the GDP.
https://moneyandmarkets.com/jeffrey-gundlach-negative-intere...
Deleted Comment
What comes after?
This exact problem is why I liked Bitcoin a few years ago. Although with the scaling issues, it seems less useful than I expected.
Better to just charge interest on cash stored at banks.
It's my understanding the larger ones were mostly used for storage or transfer?
https://en.wikipedia.org/wiki/Federal_Reserve_Note#Large-siz...
https://en.m.wikipedia.org/wiki/Trillion-dollar_coin
If not, then the current system where the digital records refer to actual cash still needs there to be actual cash somewhere. Normally you’d have it in the national bank, but since they started charging it’s better to stockpile paper.
So central banks try to counter that: "Your money will be worth less in the future, so spend it now. Or make an investment that will produce returns greater than the rate of inflation." So they spend their money, creating demand, and jobs materialize (hopefully) to fill that demand.
For the last decade-plus we've had a combination of anticipation of disaster, and banks flooding the system with cash to assuage that fear. That's like pressing both the accelerator and the brake as hard as you can -- you don't go anywhere until suddenly something gives, and then the entire thing goes to hell in a handbasket right quick.
When? If I knew that, I'd be rich. The general advice is that the market can remain irrational longer than you can remain solvent.
But who knows?
Inflation is entirely about the supply and demand for money. You were just calculating it wrong.
The dollar's relative value to goods and services isn't rising... and it's because of countries like China that make goods and services for so few dollars.
Think about it - I can go to oldnavy.com and buy a shirt for $9. That shirt was made literally on the other side of the world, shipped, marketed, sold, packaged and delivered for $9.
The disparity in incomes and environmental protections between the U.S. and other countries makes it very difficult to trigger price inflation. And things just keep getting cheaper. Prices don't rise when supply of goods and services keeps pace with the demand from dollars.
Even if they were to magically slice 20% of the share price, it would immediately start a buying rally. Anything that would have a permanent effect on the share price would probably have to threaten the very existence of the company.
That isn't to say that handing out wads of cash wouldn't eventually lead to inflation, but that the systemic lag and second-/third-order effects might make the process so unpredictable that by the time inflation begins to tick up, the central bank would have no way to provide effective control.
It's a tiger that you don't want to let out of the cage.
This policy likely has 2nd and 3rd order effects, as it will hurt other countries, but that's a simple strategy to artificially create inflation in CPI items that's fail-proof in execution. Prices will go up.
Restricting imports is much better than just giving people money, because they can use the extra money you give them on things like paying down their debt, or just put it in the bank and save it. Instead, you want to target the things they already buy and make those things scarce, so their price goes up (the definition of "inflation"). Food, fuel, and electricity are the easiest to monkey with because people are always buying them, and don't have much of a choice.
(If you can't restrict imports (or don't want to), you can simply print money to buy up the local inventory yourself and trash it/warehouse it/export it out of the country/set it on fire. The effect is the same: less inventory for the general population is available, causing the price of whatever is left to go up.)
It's much more difficult to create economic growth by persuading banks to lend more.
Zimbabwe faced similar problems after disowning their most productive agricultural providers, reducing supply.
https://en.wikipedia.org/wiki/Hyperinflation#Germany_(Weimar...
https://medium.com/@b.essiambre/the-world-deserves-a-pay-rai...
..or give the money to someone else for a while so they can do something with it.
Could they? With appropriate legislation/government action, of course.
>..or give the money to someone else for a while so they can do something with it.
You are talking about forcing them to invest the money. And what happens if that person cannot pay back what was lent to them? If there were any available investments that were safe enough, the banks would be tripping over each other to make that investment, believe me. Hoarding money costs the bank money. Investing it is not only free, but it turns their money into more money. If you were to force them to make unsafe investments, then that risk is essentially passed onto the people who deposited their money in that bank, in the form of potentially not being able to withdraw their money.
I always assumed that some of the currency issued by governments was exclusively digital.
No.
> I always assumed that some of the currency issued by governments was exclusively digital.
They aren't even really issues by the government for the most part. While government policy shapes the framework in which money is created, much is created by private lending.
https://www.investopedia.com/terms/f/fractionalreservebankin...
https://en.m.wikipedia.org/wiki/Trillion-dollar_coin
Interesting.