Cash has been a fundamental part of our daily lives for centuries. However, with the rise of digital payments and the increasing popularity of contactless transactions, the use of cash has been declining in recent years. Despite this trend, cash remains an essential payment method for many people, particularly those who are unbanked or underbanked. To ensure that cash remains accessible and widely accepted, the European Union (EU) has introduced several legislative measures. In this article, we will explore how EU legislation aims to make cash more accessible and widely accepted, with insights from Guillaume Lepecq, a financial expert.
The EU’s efforts to promote the use of cash can be traced back to the introduction of the euro in 1999. The euro was designed to facilitate cross-border transactions and promote economic integration among EU member states. However, the introduction of the euro also had a significant impact on the use of cash. As Guillaume Lepecq explains, “The introduction of the euro led to a significant reduction in currency exchange costs and made it easier for people to use cash across borders.”
Despite the benefits of the euro, the use of cash has been declining in recent years. According to a report by the European Central Bank (ECB), the use of cash for payments in the euro area fell from 79% in 2016 to 73% in 2019. This decline has been driven by the increasing popularity of digital payments, which offer greater convenience and security than cash.
To ensure that cash remains accessible and widely accepted, the EU has introduced several legislative measures. One such measure is the Payment Services Directive 2 (PSD2), which came into effect in 2018. PSD2 aims to promote competition and innovation in the payments industry by opening up access to payment data and infrastructure. As Guillaume Lepecq explains, “PSD2 has made it easier for new players to enter the payments market, which has led to greater innovation and competition. This, in turn, has made it easier for people to access and use cash.”
Another legislative measure aimed at promoting the use of cash is the Cash Payment Limit Regulation, which came into effect in 2020. This regulation sets a limit on cash payments of €10,000 or more within the EU. The aim of this regulation is to combat money laundering and terrorist financing by making it more difficult to conduct large cash transactions anonymously. However, the regulation also has the unintended consequence of promoting the use of cash for smaller transactions.
In addition to legislative measures, the EU has also launched several initiatives aimed at promoting the use of cash. One such initiative is the Eurosystem’s Cash Strategy, which was launched in 2018. The strategy aims to ensure that cash remains a viable payment method by promoting its accessibility, acceptance, and security. As Guillaume Lepecq explains, “The Eurosystem’s Cash Strategy is an important initiative that aims to ensure that cash remains accessible and widely accepted. This is particularly important for people who are unbanked or underbanked, as they may not have access to digital payment methods.”
In conclusion, the EU’s efforts to promote the use of cash are aimed at ensuring that it remains a viable payment method for all. Legislative measures such as PSD2 and the Cash Payment Limit Regulation, along with initiatives such as the Eurosystem’s Cash Strategy, are designed to promote the accessibility, acceptance, and security of cash. As Guillaume Lepecq notes, “Cash remains an essential payment method for many people, and it is important that we continue to promote its use and accessibility.”
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