Slovakia will codify the right to use cash as a method of payment after a vote to amend the nation’s constitution passed in parliament on June 15.
The new legislation was sponsored by the Sme Rodina party, also known as the “We Are Family” party, and was reportedly drafted as a precautionary measure against the proposed digital euro.
Per a report from European news agency Euractiv, legislator Miloš Svrček, one of the legislation’s co-authors, told members of parliament during a debate that the amendment was necessary to protect Slovakia’s financial sovereignty:
“It is very important that there is a provision in the Constitution based on which we can defend ourselves in the future against any orders from the outside, saying there can only be digital euro and no other payment options.”
In tandem with legislation codifying the right to use cash, Euractiv also reports Slovakia will amend its constitution to shore up shopkeepers’ rights to refuse cash for payments of goods and services. This, reportedly, is meant to protect shopkeepers from robberies and exposure to germs and to provide an exclusion to existing cash-acceptance laws for shops offering card-only vending machines.
The European Union has been exploring the advent of a central bank digital currency (CBDC) or digital euro for some time. Analysts conducting research on behalf of parliament recently described the issue as a “solution looking for a problem” yet advised the EU to be prepared to pursue the option further in the future.
Among the largest points of contention in the potential development and implementation of a digital euro is the idea that such a currency would be entirely centralized and, thus, allow a single government entity to control transactions conducted with it. Some experts believe this presents an intrinsic threat to personal privacy.
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There’s also the issue of competition. Though CBDCs could empower citizens who may have limited or no access to traditional digital banking tools without charging account premiums or intrinsic transaction fees, they present a potential threat to companies and private sector banks that profit from offering credit solutions for the underbanked.