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EURICPA stands up against cash restrictions

Categories : Cash is trust
August 8, 2017
Tags : Cash, Europe, Public good, Regulation
Various associations stepped up to defend cash following a public consultation on possible cash restrictions in the EU.
Communication Team / Equipo de Comunicación

In January 2017, the European Commission released an Inception Impact Assessment followed by a public consultation designed to explore several options to limit cash transactions, identified as a “major way” to finance terrorist activities. In response, various organizations and individuals have stepped up to the plate to defend cash payments, including EURICPA – the European cash protection association. 

EURICPA was created in 2005 in Brussels and represents the European manufacturers of intelligent solutions for cash transportation and storage, based on a system of banknote neutralisation by staining inks. The association answered to the public consultation by publishing a position paper demonstrating that cash and terrorism cannot be linked together. In addition, EURICPA firmly affirmed that cash payment restrictions would have a negative impact on the EU economy and affect European citizens’ freedom of choice. The results of the public survey led to similar conclusions. In fact, 86% believe cash restrictions will not help combat the financing of terrorism and 87% believe that such restrictions will negatively affect the economy.

In its paper, EURICPA explained that the relation between cash and terrorist activities is an old fashioned belief that pictures criminals carrying huge amount of cash in a suitcase. In reality, criminals are increasingly digitalized and take advantage of cryptographic communications and virtual currencies, which are almost impossible to track. Furthermore, the association reminded the numerous benefits of cash over card payments. Indeed, cash is available to anybody and anywhere, whereas cards induce fees and can lead to social exclusion.

Moreover, EURICPA stated that the volume of euro notes in circulation has grown steadily since its introduction in 2002, demonstrating that banknotes remain a key payment instrument, especially for P2P transactions. Cash restrictions would limit consumers’ freedom of choice and force them to use other payment methods controlled by commercial institutions. In addition, alternative solutions such as mobile banking do not ensure consumers’ fundamental right to privacy.

Earlier this year, ESTA – the Association of Cash Management Companies – also spoke out against the EU measures and demonstrated in a report that cash payment limitations would have a very little impact on terrorist activities as cash is mostly obtained from legal sources, making suspicious transactions extremely difficult to detect.

To read the original article, please click here.