How ECB is one of the lone central bank against war on cash: Greece and Sweden cases

ECB despite wanting to move into e-Euro is also one of those few central banks which understands importance of cash.

In two statements, it welcomes Swedish government’s decision to continue to provide cash services and in another one, it asks Greece Government to remove limits on cash transactions.


The ECB understands that electronic payment instruments are increasingly used as the preferred
method of payment in Sweden, while the use of cash is declining. Nevertheless, cash is a well
established means of payment providing for immediate settlement of debts and direct control over
the payer’s spending. Furthermore, the ability to pay in cash remains particularly important for
certain groups in society that, for various legitimate reasons, prefer to use cash rather than other
means of payment, or who are unable to use digital technology. Additionally, cash payments
facilitate the inclusion of the entire population in the economy by allowing it to settle any kind of
financial transaction in this way12. Further, the number of SEK banknotes in circulation in Sweden
has increased since 2017 and while the rate of identity theft and card fraud continues to rise, it is
still among the lowest in Europe13. The ECB notes that cash could play an important role in the
event of a disturbance in the payment systems, even though cash machines and other service
points may also be affected as these are dependent on interaction with the account holding


the ECB considers that the existing limit on cash payments of EUR 500
for consumer-to-business transactions, and the new tax incentives discouraging companies from
spending cash in excess of EUR 300, are disproportionate in light of the potentially adverse impact
on the cash payment system. In case the legislator wishes to preserve cash payment limitations,
higher thresholds should be chosen and a degree of flexibility should be introduced in the draft
amendments. Cash transactions above the defined thresholds should be permitted 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. In addition, competent authorities are invited to assess
whether the remaining restrictions on cash payments are proportionate and compatible with the
legal tender status of euro banknotes35, in order to ensure that the effects of these measures do
not go beyond what is necessary for achieving the objective of combating tax evasion.


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