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Slovakia's Parliament Moves to Strengthen Cash Transactions
In a significant move to safeguard its citizens' right to transact using cash, Slovakia's parliament successfully voted for a constitutional amendment on June 15. This landmark legislation guarantees citizens' right to use cash for purchasing goods and services, underlining its continued relevance in the national economy.
The Context of the New Legislation
The legislation, spearheaded by the Sme Rodina party, also referred to as the “We Are Family” party, was principally established as a safeguard against the possible introduction of a digital euro. This protective measure, according to reports from the European news agency Euractiv, was seen as a critical step in preserving Slovakia's financial autonomy.
Miloš Svrček, a lawmaker and co-author of the legislation, emphasized during parliamentary debates that this constitutional amendment was vital in defending Slovakia against external mandates limiting the country to a digital-only euro. He stated that the constitution must contain provisions that ensure Slovakia can resist any such future impositions.
Further Amendments to Bolster Shopkeepers' Rights
Alongside this legislation securing the right to cash transactions, Euractiv also reported that Slovakia would make further constitutional adjustments to protect shopkeepers' right to reject cash payments for goods and services. This modification is intended to safeguard store owners against potential robberies and health risks from handling cash, and it creates an exception to existing laws mandating cash acceptance in retail settings offering card-only vending machines.
The EU's Exploration of a Digital Euro
The European Union has been delving into the possibilities of a central bank digital currency (CBDC) or a digital euro for a while now. Recent reports indicate that parliament researchers have labeled this venture as a “solution looking for a problem,” but they still advise the EU to stay ready to explore this avenue further in the future.
The potential development and roll-out of a digital euro raise significant concerns, primarily around the idea of centralization. The digital euro, being entirely centralized, would grant a single governmental body complete control over transactions carried out using it, posing potential threats to personal privacy.
Additionally, there are concerns regarding competition. Even though CBDCs could be a boon for citizens with limited or no access to conventional digital banking services, potentially eliminating account charges or inherent transaction fees, they could pose a significant threat to corporations and private banks that profit from offering credit solutions to those underserved by traditional banking.
