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With states discussing the possibility of creating entirely digital currencies, the debate over the place of cash in society has only intensified. That is why the opinion given recently by Giovanni Pitruzella, the advocate general of the Court of Justice of the European Union (CJEU), is of such interest to people concerned with state encroachment on individual freedoms. The main takeaway was that the court found that an individual’s right to pay for services in euro banknotes should be protected, with very limited exceptions to the rule.
Freedom through cash
While the CJEU opinion is non-binding, Pitruzella’s words reinforced arguments around the importance of cash as an emblem of and instrument through which to express personal freedom within the European Union (EU).
“The concept of legal tender as regards euro banknotes […] must be understood as entailing in principle the mandatory acceptance of euro banknotes by the creditor of a payment obligation,” Pitruzella writes.
The ideas that underpin the advocate general’s words concern the importance of cash in protecting individuals from undue controls, as well as the substantive link between cash and the notion of legal tender.
The case under review pertained to a company refusing to accept payments in cash, an issue that has been discussed in different forms across the EU and beyond. Ultimately, Pitruzella argued that in current EU law there is “an obligation on public authorities to accept euro banknotes if they are intended to meet statutorily imposed payment obligations.”
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Crucially, he highlighted that although exceptions can be based on grounds of “good faith” or for reasons of the public good, they cannot be based “merely on reasons of administrative practicability or cost savings.”
Pitruzella’s opinion went in favor of two individuals who had been charged late payment fees for refusing to pay a German broadcasting company through one of its preferred forms of payment. The advocate general’s decision has dealt a blow to arguments in favor of eradicating cash, calling into question the imposition of state controls on how and in what form consumers make payments.
Why this opinion is significant
In recent years, public debate has been forced to address the issues which have risen since the emergence of technologically facilitated payment methods, such as debit cards, digital payments and digital currencies.
“Regardless of technological developments and payment method variety, the only truly private transaction, in which no third party (public or private) has a prying eye, is cash,” writes one web journalist.
To understand this, we must acknowledge that there are clear differences between cash and digital means of payment. Cash is not digitally trackable like online payments. Cash requires no intermediary for a transaction to function, nor an infrastructure through which to process that transaction. To use cash is to make a financial choice that requires no ratification from any public or private authority.
Simmel on money and freedom
“Money is really that form of property that most effectively liberates the individual from the unifying bonds that extend from other objects of possession,” argues Georg Simmel, the 19th-century German philosopher in his magnum opus, The Philosophy of Money.
What Simmel asserted is that money uniquely empowers individuals to self-define through their choices – their freedoms. Rather than having an identity solely and forcefully thrust upon them as a consequence of their specific trade or station in life, money gives them an unmonitored opportunity to craft their own self-image through the economic decisions they make.
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Alternatives to the cash that Simmel’s theories handle, such as digital payments, while allowing some of this freedom, can never be true cash equivalents as they necessitate one form of third-party control or another.
These alternatives provide freedom of choice regarding what services and products one purchases with the rewards of one’s labors. However, they lack that second dimension, that of protection from unreasonable surveillance and control freedom that goes hand in hand with the democratic principles that underpin the EU.
Society maintains a tension between order – the unifying force – and personal freedom – the rights of the individual. If we move too far one way, things will not function effectively, and if we go too far the other way, individuals must endure oppression. This balance is delicate and in constant flux. Cash is one of the bedrocks of the modern society, which stabilizes this flux. For this reason, EU citizens should be pleased that the CJEU has confirmed cash as a constitutional freedom.
Luke Moriarty
Canadian fellow, who worked three decades for local and national administrations. I am now retired and closely follow issues related to cash and digital currencies.
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