Enshrining the Right to Cash in Law

In the June issue of Currency News™, our lead article was on laws to protect cash gaining momentum, with specific reference to the euro and a proposal on legal tender status for notes and coins. This month we look at some developments on an individual country basis in Europe regarding enshrining the right to cash in law, both within and outside the eurozone.

In the UK, the Financial Services and Markets Act of 2023 received Royal Assent in June. A late amendment, following pressure from consumer groups, concerned access to cash, and in particular ensuring that people across the country can withdraw and deposit cash for free.

The Financial Conduct Authority (FCA) has been given greater powers over major banks and building societies to ensure reasonable free access to cash is preserved for those who need it. The government has now announced that UK banks will have to ensure access to cash within three miles of most citizens, with those falling below the minimum service level facing a fine. The new rules are expected to take effect next summer. Virtually the whole population already lives within the stipulated range of an ATM or other cashpoint, but this is increasingly under threat as more and more bank branches and ATMs close.

This doesn’t go far enough for the UK television and radio news channel GB News, which has launched the ‘Don’t Kill Cash’ campaign, and has already collected over 300,000 signatures, adding further pressure to the government to introduce legislation to protect physical cash.

As part of the campaign, presenters from GB News unveiled a huge inflatable piggy bank outside Parliament to highlight the issues of an increasingly cashless society, and are urging the government to protect the status of cash as legal tender and as a widely accepted means of payment in the UK until at least 2050.

The campaign has received support from across the political spectrum.

In Austria, the government is planning to enshrine the right to use cash in its constitution, ensuring that cash continues to be accepted in shops and guaranteeing access to ATMs to all residents.

‘Everyone should have the right to choose how and in what form they want to pay,’ said Chancellor Karl Nehammer, who faces national elections in 2024. ‘People in Austria have a right to cash.’

He has requested that the country’s Finance Minister draw up a proposal ahead of a meeting with banks in September.

€47 billion is withdrawn from ATMs every year in Austria, and on average, every Austrian carries €102 in cash. 67% of payments under €20 are paid in cash.

The far-right Freedom Party has campaigned widely against restrictions on cash, part of its push against the European Central Bank’s move toward setting up a digital euro. The opposition Socialist Party is calling for banks to face requirements to install cash machines — and pay the costs.

With one of the highest densities of ATMs in the euro area, Austrians need to travel on average only 1.1 km to access one of more than 9,000 machines, according to the country’s national bank. Austria has almost doubled the number of ATMs per million residents since 2000 and has about 80% more cash machines than the European Union average, according to European Central Bank data.

Unlike in the UK, the Chancellor’s announcement was met with criticism from both ends of the political spectrum. The Social Democratic Party said that right to cash was worthless if ‘there won’t be a single ATM left in Austria’, while the Freedom Party accused Nehammer of stealing its idea.

Neighbouring Switzerland is set to hold a plebiscite on a similar proposal to anchor rights in the constitution. The Swiss federal government is seeking to amend the constitution and seven members serving as the joint head of state and government along with the Federal Council of Switzerland have made the statement about ‘the importance, for the economy and society, of the role played by cash.’ 

A petition needs to be signed by 100,000 citizens, 1.2% of the population, by August 2024 supporting the retention of coins and banknotes as legal tender. That number has already been exceeded.

In the Netherlands, meanwhile, the Dutch Finance Minister has proposed legislation to ensure the provision of cash facilities, at least to a basic level, supported by the Dutch National Bank (DNB). Both believe it is in the public interest that cash continues to function effectively as a means of payment, even if its use continues to decline in the future.

In April 2022, organisations and groups involved in the Dutch cash payment system reached agreement in the Cash Covenant. The Minister, Sigrid Kaag, decided to propose legislative measures to anchor that agreement in statute.

DNB wants the Cash Covenant to remain in place until the legislation comes into force. In the meantime, DNB expects all parties to the Covenant to fulfil their civic responsibility by continuing to respect the agreements made for the smooth functioning of the payment system.