CashMoney in physical form such as banknotes and coins. More accounted for 73% of all physical retail payments in 2019

On 17 September, ECB President Christine Lagarde shared her vision of payments in a digital world and addressed cash, European payments sovereignty and  central bank digital currencies. According to the ECB’s new payments survey, which is due to be published in November, cash is the most common way to pay in the euro-area, with cash payments accounting for 73% of all physical retail payments in 2019. Lagarde said: “The EurosystemThe Eurosystem comprises the European Central Bank and the national central banks of those countries that have adopted the euro. More will continue to ensure that all citizens have access to banknotes at all times.”

The Commission’s strategy is in line with the ECB’s vision and focuses on creating the conditions to make the development of instant payments and EU-wide paymentA transfer of funds which discharges an obligation on the part of a payer vis-à-vis a payee. More solutions possible; consumer protection and ensuring payment solutions are safeSecure container for storing money and valuables, with high resistance to breaking and entering. More; and lessening Europe’s dependency on big global players in this area. It is articulated around 4 pillars:

• Pillar 1: Increasingly digital and instant payment solutions with pan-European reach
• Pillar 2: Innovative and competitive retail payments markets
• Pillar 3: Efficient and interoperable retail payment systems and other support infrastructures
• Pillar 4: Efficient international payments, including remittancesMoney sent home from emigrants working abroad. More

30 million adults in the EU do not own a bank account

Cash is an integral part of the first pillar. The Commission recalls that “It is still the only form of moneyFrom the Latin word moneta, nickname that was given by Romans to the goddess Juno because there was a minting workshop next to her temple. Money is any item that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular region, country or socio-economic context. Its onset dates back to the origins of humanity and its physical representation has taken on very varied forms until the appearance of metal coins. The banknote, a typical representati... More individuals can hold directly. As such, it should remain widely accessible and accepted.”  While promoting the emergence of digital payments, the Commission recalls that there are about 30 million European adults who do not have a bank account.

The Commission recognises nonetheless that the accessibility and acceptance of cash have decreased in recent years. This trend has accelerated during the pandemic due to concerns over banknotes and coins being associated with the transmission of the virus as well as a shift to online shopping during lockdowns.

Cash is a public good

In order to preserve access to and acceptance of cash, and its legal tenderMoney that is legally valid for the payment of debts and must be accepted for that purpose when offered. Each jurisdiction determines what is legal tender, but essentially it is anything which when offered (“tendered”) in payment of a debt extinguishes the debt. There is no obligation on the creditor to accept the tendered payment, but the act of tendering the payment in legal tender discharges the debt. More, the Commission:

• Recalls that, as legal tender, euroThe name of the European single currency adopted by the European Council at the meeting held in Madrid on 15-16 December 1995. See ECU. More banknotes and coins must be accepted by the creditor at full face valueThe figure or amount written on the banknote or coin which indicates the amount of its economic value. It is usually written in letters and numbers. More where a payment obligation exists and they have the power to discharge the payment obligation.
• Expects Member States to ensure the acceptance and accessibility of cash as a public good.

In the framework of the Euro Legal Tender Expert Group (ELTEG), the Commission will take stock of latest developments regarding the acceptance and availability of cash within the euro area with the ECB, national central banksIn general, the expression refers to the central banks of different countries. More and treasuries. In parallel, it will closely follow the work on access to cash to be carried out under the auspices of the Euro Retail Payments Board. Taking this work into account, as well as the deliberations of the Euro Legal Tender Expert Group, it may decide to take appropriate action to protect the acceptance and availability of euro cash at the end of 2021.

In 2010, the Commission issued a non-binding recommendation stating that the acceptance of euro banknotes and coins as a means of payment in retail transactions should be the rule, and that refusals should be possible only on the basis of the “good faith principle”. It also implies that where a payment obligation exists, the legal tender of euro banknotes and coins implies: (a) mandatory acceptance by the creditor; (b) at full face value; and (c) with the power to discharge the payment obligation.

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