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Italian central bank raises concerns over government's pro-cash plans

Italian central bank raises concerns over government's pro-cash plans

Plans by Italy's new government to promote cash over digital payments are facing pushback from the country's central bank over black economy and tax evasion concerns.

In its draft budget, the rightwing coalition government led by Giorgia Meloni has proposed raising the legal limit for cash transactions from €1000 to €5000 and allowing merchants to refuse digital payments of less than €60.

However, the Bank of Italy's economic research unit chief, Fabrizio Balassone, has testified in parliament that "limitations to cash use pose a hurdle to several forms of crime and [tax] evasion."

Merchants in Italy currently have to accept electronic payments of any value or face fines of €30 and four per cent of the transaction value.

The rule was introduced as part of Italy's post-Covid national Recovery and Resilience Plan and linked to around €200 billion in funds from the EU.

Balassone told parliament that going back on the move risks "clashing with the drive to modernise the country".

Meloni has rejected the argument that cash usage encourages tax evasion but in a video on social media did suggest that the merchant cash acceptance position could change in the face of EU pushback.

"Until €60, we would like not to force retailers to accept electronic payments. But let's say that the €60 threshold is indicative, for me it could even be lower."

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