Legal tender

The European Central Bank has delivered a legal opinion supporting the draft law proposed by the Swedish government, which aims at guaranteeing that the largest banks provide a minimum level of cash services throughout the country.

Efforts to ban cashless retail are gaining momentum across the US. After Philadelphia, New Jersey, San Francisco, Massachusetts, and other cities and states have taken action to guarantee the acceptance of cash. In total there are 11 bills currently approved or making their way through the legislative process.

The Dutch government is putting forward a package of measures to Parliament, aimed at fighting against money laundering. Two of these measures specifically target cash: banning cash payments above and scrapping the €500 note.

The European Commission proposes to introduce EU-wide restrictions on cash payments.

While digital payments can be encouraged, they should not aim to make cash redundant. There is huge merit in having cash as a viable option for payments.

The European Consumer Organisation (BEUC) concludes that cash has a number of advantages which cannot be matched by any electronic payment method, at least for the time being. Those features explain in large part why cash is still widely used by consumers. They also underline why the idea of a cashless society should be buried.

In 2016, several high-denomination notes were withdrawn from circulation around the world. Other countries could follow.

Six months after the ECB decision to stop issuing €500 notes, how has demand for the euro and for the €500 evolved ?

There is little or no evidence that restricting cash payments contributes to curb tax evasion or money laundering. And these measures could also have a negative impact on consumption.

On May 5, the ECB decided to discontinue the production and issuance of the €500 banknote, after. a series of criticisms targeting the €500 and high-denomination notes more generally. The same critics are pursuing their claims and are now calling for the further elimination of high-denomination notes. Unfortunately, they are forgetting three things.

Personal and national security would be imperiled by a cashless society.