FameEX Hot Topics | Slovakia Reacts to Concerns Over Digital Euro by Embedding Cash Rule in Constitution

In response to mounting apprehensions surrounding the potential introduction of a digital euro, Slovakia's parliament recently passed an amendment to its constitution, solidifying the right of its citizens to utilize cash as a method of payment. The amendment, put forth by the Sme Rodina party, also known as the "We Are Family" party, is primarily aimed at preserving Slovakia's financial sovereignty.

During the parliamentary debate, legislator Miloš Svrček, one of the co-authors of the amendment, emphasized the necessity of this constitutional provision as a means to shield against external pressures that might attempt to restrict payment options exclusively to the digital euro. Svrček underscored the importance of upholding diverse payment alternatives to safeguard the country's autonomy.

Furthermore, alongside the codification of the right to use cash, Slovakia intends to introduce additional constitutional amendments to safeguard the rights of shopkeepers who prefer not to accept cash payments. This measure addresses concerns such as theft and the transmission of germs. It also allows certain establishments to operate card-only vending machines while exempting them from existing laws requiring the acceptance of cash.
The European Union has been actively exploring the notion of a central bank digital currency (CBDC) or digital euro. However, researchers representing the parliament have characterized this initiative as a "solution looking for a problem." Nonetheless, they recommend that the EU remains prepared to pursue the option in the future.

One significant point of contention surrounding the potential development and implementation of a digital euro is the apprehension that it would be entirely centralized, granting a single governing body complete control over transactions. This concern has raised alarms among experts who fear that it poses a substantial threat to personal privacy.

Another pertinent issue revolves around the potential impact on competition. While CBDCs could offer financial inclusion to individuals with limited access to traditional banking services, free from additional account fees or transaction charges, they also pose a potential threat to companies and private banks that profit from providing credit solutions to the underbanked population.

Slovakia's decision to amend its constitution reflects a proactive approach to preserve financial autonomy and protect citizens' right to use cash in transactions. By enshrining these rights, Slovakia aims to safeguard its economic independence and maintain a diverse payment landscape that encompasses both traditional cash and digital alternatives. This move signifies the country's commitment to striking a balance between the benefits of digital innovation and the preservation of established payment systems.

Disclaimer: The information provided in this section is for informational purposes only, doesn't represent any investment advice or FameEX's official view.