(Finance) – The European Central Bank (ECB) urges EU lawmakers to introduce an explicit ban on the unilateral withdrawal of cash by businesses at the time of payment by consumers, arguing that it is necessary to safeguard the legal tender status of euro banknotes and coins, particularly in light of the decline in cash acceptance across the Eurozone.
This is what emerges from one answersigned by President Christine Lagarde, at requests for opinion on the topic arrived in recent months from the European Parliament and the Council of the European Union, and concerning a proposal for a regulation of the European Parliament and of the Council on the legal tender status of euro banknotes and coins.
The document points out that, despite the digitalisation of the Union’s economy and the growing use of electronic means of payment, cash continues to play an important role in society. “There ability to pay in cash remains particularly important for some groups of society who, for various legitimate reasons, may prefer the use of cash rather than other means of payment or may not have access to banking services and electronic means of payment – we read – These groups include disabled citizens, immigrants, socially vulnerable citizens, elderly people, minors and others with limited or no access to digital payment services”.
Furthermore, the ECB explains that cash is useful as a payment instrument because it is “widely accepted, fast and facilitates control over spending of the payer”. Furthermore, it is currently the only payment instrument that allows citizens to settle a transaction in central bank money, which is also settled instantly, while ensuring privacy.
The ECB therefore shares the concerns expressed in the proposed regulation regarding “unilateral ex ante cash exclusions” by retailers or service providers, as the spread of such situations it would “seriously” compromise the legal tender status of euro banknotes and coins.
According to the Frankfurt institution, “a new provision should be included in the proposed regulation for clearly state that ex ante unilateral cash exclusions are prohibited“.
The ECB also suggests amending the definition of unilateral ex ante cash exclusion in the proposed regulation to clarify that it includes “no cash” practices (e.g. “no cash” signs at shop entrances or at points of sale) as well as contractual clauses that have not been individually negotiated (e.g. pre-formulated standard contracts).