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Brussels officials have confirmed that legislation to enhance access to cash for EU citizens is on the way, as the European Commission’s leadership uses the digital euro conference to endorse and protect paper money.
“The commission will present a regulation that clarifies the legal tender status of euro cash and ensures that everyone will continue to have access to cash in the future,” said Valdis Dombrovskis, European commissioner for trade, at the EU’s conference, "Towards a legislative framework enabling a digital euro for citizens and businesses".
This amendment is likely to come alongside the EU’s digital euro legislation, which has been penned for early 2023, and will complement the European Central Bank’s (ECB) work developing a central bank digital currency (CBDC).
Sources in Brussels had previously anticipated that this action may take place.
Although the commission has been enthusiastic in its backing for the digital euro project, and digital payments in general, politically it has also been under pressure to protect the use of traditional cash.
By seeking to link the rollout of the digital euro as a complement to cash, the commission will, in particular, please high cash using member states such as Germany and Austria.
“Member states will need to maintain and increase their work to boost digital skills and financial literacy, as well as broadband coverage,” said Dombrovskis. “But to be clear, euro cash is not going to disappear. It will remain for everyone to use.”
Cash is still very important in people’s lives, he said, although he also acknowledged that its use is declining in many parts of the world, including in the EU, where there is an increasing demand for digital payment methods.
For example, the ECB estimates that non-cash payments made in the euro area in 2021 increased by 12.5 percent to 114bn transactions, with a total value of €197trn.
If it was to create new access to cash rules, the European Commission would be following in the footsteps of the UK government, which intends to use the Financial Services and Markets Bill to enhance access to cash provisions in the UK.
Spain and Sweden, the latter of which is one of the world’s most cashless societies, too have introduced cash-related laws recently.
Speaking on one of the panels, Mairead McGuinness, the commission's financial services chief, was keen to endorse cash as a means of payment that is here to stay.
“One of the concerns that I have is that there are citizens who think that this is part of an overall approach,” said McGuinness.
There is no agenda for removing cash, she said, adding that she hoped that the EU’s conference would help reinforce that this is not the case.
“We absolutely defend the right of citizens to have cash,” she said, adding that it is known in many member states that citizens are moving towards not carrying cash, hence the need for the digital euro investigation.
