Disappearing cash, the chilling rationale: "seeking perpetual domination over us"
In the heart of Europe, Spain finds itself at the centre of a heated debate concerning the circulation of the digital euro. The controversy revolves around preserving the freedom of cash payments and ensuring financial inclusion amidst the digitalisation of money.
Critics argue that a digital euro, as a central bank digital currency (CBDC), could potentially disadvantage those who rely on cash for privacy, accessibility, or technological reasons. Advocates, on the other hand, emphasize the importance of maintaining cash as a payment option to protect user choice and avoid exclusion of vulnerable groups who might not have seamless access to digital payment infrastructures.
The European Central Bank (ECB) is actively working on the design and rulebook for the digital euro, involving extensive stakeholder engagement to ensure the digital euro will be inclusive and user-friendly. This reflects awareness of concerns around financial inclusion, aiming to accommodate users who might otherwise struggle with purely digital payment modes.
Recent events, such as Spain's nationwide blackout in April 2022, have highlighted vulnerabilities tied to digital and electrical infrastructure. This has fuelled skepticism about the digital euro’s potential impact on cash payment freedom and societal resilience.
Key arguments in the controversy include:
- For cash payment freedom: Cash provides anonymity and privacy, which digital currencies cannot fully guarantee. Maintaining cash supports consumers without access to smartphones, banking apps, or stable internet. Cash is a fail-safe during power outages or cyber incidents.
- For financial inclusion: The digital euro design aims to include vulnerable and underbanked populations by making digital payments accessible and user-friendly, based on extensive consumer research. Digital euro features being tested include conditional payments and integration with various financial services to foster inclusion.
- Concerns specific to Spain: Heightened political distrust, fueled by misinformation linking digital euro adoption to loss of sovereignty or elite control, intensified in the context of infrastructural outages. Security concerns stem from geopolitical tensions and digital dependencies, magnified by incidents like the blackout and controversial tech contracts.
While the ECB pursues a digital euro intended to complement cash—preserving cash use as a fundamental retail payment option—Spain’s social and political context underscores the sensitive balance between embracing innovation and protecting cash freedom and inclusive access.
Rupérez, President of the Platform Denaria, criticized the limit for cash payments in Spain of 1,000 euros, arguing that the European Commission recommends a limit of 10,000 euros. The ECB, however, has defended that cash should continue to be guaranteed at the same level of acceptance as any other payment when the digital euro exists.
Platform Denaria recently organized an event at the Congress of the Deputies titled "Financial Inclusion in Spain. Cash as a secure and sustainable solution". The event aimed to discuss the role of cash as a tool for personal autonomy, coexistence, and collective organization, with participation from several organizations.
As the debate continues, ongoing stakeholder engagement and technical experimentation will inform the final shape of digital euro circulation in the euro area, including Spain.
- Critics, such as Rupérez from Platform Denaria, contest the limit for cash payments in Spain at 1,000 euros, referring to the European Commission's recommendation of a limit at 10,000 euros, arguing for the importance of cash as a secure and sustainable solution.
- Despite advocates' emphasis on maintaining cash as a payment option to protect user choice and avoid exclusion, the design of the digital euro and potential concerns regarding financial inclusion in Spain have spurred debates about the impact on vulnerable and underbanked populations, particularly in light of Spain's social and political context.
- Beyond the spheres of business and finance, the debate around the digital euro is intertwined with general-news and crime-and-justice discussions, as potential impacts on freedom of cash payments, privacy, and societal resilience are assessed alongside concerns about security and geopolitical tensions.
