Late last year, the International Monetary Fund (IMF) published a paper titled, ‘Monetary Policy with Negative Interest Rates: Decoupling Cash from Electronic Money’, sparking debate across the media about what the proposed policy would mean for the future of cash.
With the aim of ending speculation, Lukas Mandl, a Member of the European Parliament from Austria, issued three official questions for the European Commission to answer in writing regarding their determination in protecting the world's most preferred payment method.
Question for written answer E-002074/19 to the Commission from Lukas Mandl (PPE) (18 April 2019)
- Is the Commission totally committed to the right to use cash as legal tender?
'Time and time again there are reports in the media about attempts to do away with cash as legal tender. Should only electronic payment operations be possible in future, there would be a risk...'
- Would the IMF’s idea for annual depreciation of electronic money by levying negative penalty interest contravene EC law?
- Is the Commission considering taking firm and high-profile action to counter the IMF’s notions about depreciation of electronic money through negative penalty interest rates?
Answer given by Vice-President Valdis Dombrovskis on behalf of the European Commission (20 June 2019)
'The Commission acknowledges the fact that cash remains the most popular payment instrument in the EU and confirms that it remains committed to the right to use cash as legal tender.'
The ideas put forward in one of the many research papers of the International Monetary Fund are designed to elicit comments and to encourage debate. The question as to whether the ideas that they contain could contravene EC law is purely hypothetical.
In other words, the reports of the death of cash are greatly exaggerated...