The end of cash is near. This shows the entry into force of the new Fraud Actwhich significantly reduces the maximum amount for cash payments, up to 1,000 euros. The move is one of the first moves to make cash disappear entirely in the years to come, and was passed as central banks develop their own digital currencies.
The new limit for cash payments set by the government brings Spain in line with other neighboring countries such as France or Italy and represents a significant reduction compared to some European Union partners, such as Germany, where there is a limit even though citizens paying more than 10,000 euros in cash who need to log operations.
The change in Spain’s cash payment regulation comes as central banks develop their digital currency projects. In case of European Central Bankthe institution announced a few months ago the release of adigital euro‘ which the technology would entail Blockchainthe basis of cryptocurrencies, in their structure.
However, many European citizens are used to paying and making purchases by card on-line -even more so as a result of the pandemic- the truth is that other age groups may distrust or not know how to do it. For this reason, the President of the ECB, Christine LagardeHe wanted to make it clear that the digital euro “will never replace cash”.
What does a future without cash look like?
Despite this, everything seems to indicate that cash will finally disappear over time through disuse. The new generations prefer to pay by card, even in physical stores, making cash harder and harder to find.
In this context, the digital euro can be a response to consumer demands in a framework where the traceability and security of transactions are not 100% developed. For cryptocurrencies, the technology Blockchain allows to eliminate intermediaries, as well make instant transfers anywhere in the worldwhich will predictably be one of the strengths of the digital euro.
In addition, the government follows the logic of lowering the maximum amount for cash payments fraud proof is another key benefit of the future digital euro. In this sense, the presence of Blockchain with us it would end with the typical “With or without VAT?”. According to some studies Italy could raise up to 30,000 million euros per year with this measure alone.
However, everything seems to indicate that the launch of the digital euro will take at least a few more months to become official and that cash will not completely disappear from our lives for a few years. Meanwhile, other trends in post-pandemic society are setting the tone where the fintech establishes itself as a future industry.