ECB continues to warn governments against war on cash…

Not all central banks have joined hands with their respective governments (rather bowed to governments’ pressure) on war on cash. ECB is one such central bank and its unique structure could be a reason for this. It is not answerable to any one country/government and can express itself much freely compared to others on the matter.

I had earlier pointed how it has asked two governments to go slow on war on cash. These were Portugal and Belgium.

Now it asks Bulgaria to go slow as well.  The Bulgarian Govt wants to lower transactions in cash:

The draft law seeks to gradually decrease the maximum limit for cash payments in Bulgaria from the current limit of BGN 10 000 to BGN 1 000 by 2019. The same maximum limit would apply to the payment of instalments in performance of a contractual obligation where the total amount is above
the maximum limit.
1.2 As in the currently applicable law, the maximum limit would apply both to payments in BGN, as well as payments in foreign currencies which are of equivalent amounts.

ECB says:

In particular, the decreasing limits on cash payments proposed by the draft law need to take into
account the advantages of having limits on cash payments in place and the potential
inconvenience thereof for citizens’ regular transactions in certain market segments. Setting the
limitation at these levels may make it difficult to implement the limit in practice. In this regard, it
should be noted that Directive (EU) 2015/849 of the European Parliament and of the Council14,
whilst confirming the vulnerability of large cash payments to money laundering and terrorist
financing, nevertheless applied customer due diligence measures to cash payments of EUR 10 000
or more. This implies that the draft law should establish a proportionate threshold for limits to cash
payments, taking into account the objectives of such limits.

2.11 Against this background, the ECB considers the lowering of the limit on cash payments to BGN
1000 (approximately EUR 500) by the 1st of January 2019 as disproportionate, in the light of the
potentially adverse impact on the cash payment system. In case the legislator wishes to pursue the
proposed cash payment limitations a higher threshold should be chosen and a degree of flexibility
should be introduced in the draft laws by, for example, allowing the delivery and receipt of cash
payments for compelling reasons or for reasons that are outside the individual’s control15, such as
where no payment service provider is available at the place or time of the payment. It might also be
advisable to allow cash transactions above the defined thresholds as long as the parties are able to
ensure that the payment is traceable by identifying the amount, the reason for the transaction and
the parties involved.

More importantly, it is putting all these discussions on its website for all to access. So unlike India, where we are moving from one rumor to another.

 

Advertisements

One Response to “ECB continues to warn governments against war on cash…”

  1. Oleg Komlik Says:

    Cashless society is the bank-controlled society. See the first link “In praise of cash”…
    https://economicsociology.org/2017/06/26/bits-briefs-in-praise-of-cash-mechanical-turn-in-economics-financialization-of-higher-education-economics-of-racial-violence-decline-in-manufacturing-shapes-family-structure/

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: