ECB launches staunch defence of cash
15 February 2018 | 12641 views | 10
European Central Bank executive board member Yves Mersch has given a spirited defence of cash, praising its ability to facilitate privacy, equality and security, insisting there is "no viable alternative" to the humble euro banknote.
The rise of cards, mobile payments and even alternative cryptocurrencies such as Bitcoin over recent years has seen cash in retreat, with many predicting that it will soon become obsolete.
In a speech hosted by Deutsche Bundesbank, Mersch acknowledged the trend away from physical money, revealing that five EU member states - Cyprus, Bulgaria, Belgium, Portugal and Denmark - approached the ECB last year to consult on measures to limit the use of cash.
But Mersch is insistent on cash's value as legal tender, throwing particular scorn on the argument that its anonymity helps criminals.
"Protection of privacy matters to all of us. Privacy protects people from the risk of a surveillance state and thought police. No particular link can be established statistically between cash and criminal activities. The focus must be on the fight against crime. Cash must not be made the scapegoat," he told his audience.
Mersch also praised the ability of cash to ensure equality and participation: "The easy accessibility to cash, especially for the elderly, the socially vulnerable or minors, allows people to participate in society and, for example, allows children to learn how to handle money.
"In particular, when socially vulnerable people use cash, they face none of the barriers involved in applying for a credit card or, despite all their efforts, opening a current account."
In addition, he noted that cash "always works" in a way that more technology-reliant methods of payment do not because of things such as network and power failures.
Concluding, Mersch told his audience: "[P]rinted euro banknotes will retain their place and their role in society as legal tender for a very long time to come. There is no viable alternative to euro cash.
"There is good reason to believe that banknotes don’t only have to take the form of printed paper, cotton or polymer. However, printed banknotes will remain our core business. And if there is public demand for digital central bank money, this should only be a technical variant of cash."