Disclosed is a temporary banknote storage device (100), comprising a first sensor (102), a second sensor (103), a storage coiling block (104), a spare tape coiling block (105), a coiled tape (105) having two ends which are fixed on the storage coiling block (104) and the spare tape coiling block (105) respectively and are capable of coiling, uncoiling and winding between the storage coiling block (104) and the spare tape coiling block (105), a transfer channel (101), a first power motor (109), a second power motor (110), a third power motor (111) and a microcontroller (106). The microcontroller (106) controls the first power motor (109), the second power motor (110) and the third power motor (111). Further disclosed is a method for improving coiling block storage capacity. Two adjacent banknotes have a spacing in the temporary banknote storage device less than the spacing they have outside the device, so that the coiled tape and structure space utilization rate is increased to improve the storage capacity of
