The European Central Bank (ECB) has reaffirmed its commitment to maintaining a euro cash system.
Commenting on a December ECB study on the payment attitudes of consumers in the euro area in a Monday (Feb. 6) blog post, the regional bank noted that cash remains the most used form of payment for everyday transactions in the eurozone. As such, the post noted that even as noncash payment methods grow in popularity, the ECB is committed to maintaining the euro cash system for the foreseeable future.
The study found that cash accounted for 59% of all payments at the point of sale (POS) and remains the preferred means of payment for 22% of those surveyed. And even though 55% of euro-area consumers reported that they prefer noncash means of payment, 60% said that they value having the option to pay in cash.
When asked what the main advantages of cash were, respondents to the ECB’s survey highlighted two main benefits: 40% said that it makes them more aware of their own spending, while another 40% pointed to the anonymity of cash transactions.
In light of this, even as the ECB investigates the potential of issuing a digital euro, the blog post pointed to plans to redesign euro banknotes by 2024 as a sign of the central bank’s long-term commitment to physical money.
As the post’s authors put it: “A healthy payment system guarantees access to different payment options as well as the freedom to choose.”
The blog post echoed comments made by ECB Executive Board Member Fabio Panetta in a January speech discussing the digital euro project, during which he said “the digital euro would not replace other electronic payment methods, or indeed cash,” but would rather complement them.
Meanwhile, the latest report comes at a time when cash policy has resurfaced as a political talking point in some countries across the region.
In Italy, for example, the government has repeatedly reshaped its pro-cash stance in recent months, ultimately aligning with European Union orthodoxy by ditching controversial plans that would have allowed merchants to refuse card payments under 60 euros (about $64).
Last year, new rules in Spain also went into effect, making it illegal for retailers to refuse cash payments, while U.K. lawmakers pushed for legal protections that would guarantee access to cash and in-person banking services in underserved areas, in response to a massive wave of branch closures across the country.
Read more: Cash Holds Firm in Europe Despite Dwindling Hard Currency Supply
Despite this firm stance on hard currencies, European nations are gradually embracing digital currencies too.
Spain is home to the first euro-denominated stablecoin to have emerged from a central bank-supervised regulatory sandbox in the form of the EURM token to be issued by Spanish FinTech firm Monei.
Still in its pilot stage, and assuming it graduates from the Banco de España’s sandbox without problems, EURM will be the first such digital token to receive the official stamp of approval from the European central bank, a move Monei is hoping will give it an edge over other euro-denominated stablecoins.
As PYMNTS previously reported, the Spanish FinTech’s entry to the market comes at a time when EU policymakers are increasingly voicing their opposition to unbacked, unregulated crypto assets. And if the company plays its cards right, it may be able to turn a lack of central bank oversight into a competitive advantage.
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