FameEX Hot Topics | Slovakia Embeds Cash Rule in Constitution Amid Concerns Over Digital Euro

Slovakia's parliament recently approved an amendment to its constitution, solidifying the right of its citizens to use cash as a payment method. The move comes in response to growing concerns over the potential introduction of a digital euro. The amendment, proposed by the Sme Rodina party (also known as the "We Are Family" party), aims to safeguard Slovakia's financial sovereignty.

During a parliamentary debate, legislator Miloš Svrček, one of the co-authors of the legislation, emphasized the need for the amendment, stating that it was essential to have a constitutional provision to protect against external pressures that might restrict payment options to only the digital euro. Svrček stressed the importance of maintaining diverse payment options to preserve the country's autonomy.

In addition to codifying the right to use cash, Slovakia intends to further amend its constitution to protect the rights of shopkeepers who wish to refuse cash payments. This measure aims to address concerns such as theft, the spread of germs, and also allows certain establishments to operate card-only vending machines while exempting them from existing cash-acceptance laws.

The European Union has been exploring the concept of a central bank digital currency (CBDC) or digital euro. However, researchers working on behalf of the parliament have described this initiative as a "solution looking for a problem." Despite this, they recommend that the EU remains prepared to pursue the option in the future.

One of the primary points of contention regarding the potential development and implementation of a digital euro is the fear that it would be completely centralized, enabling a single governing body to exercise control over transactions. This has raised concerns among experts who believe it could pose a significant threat to personal privacy.

Another issue at hand is the potential impact on competition. While CBDCs could provide financial inclusion to individuals with limited access to traditional banking services, without additional account fees or transaction charges, they pose a potential threat to companies and private banks that profit from offering credit solutions to the underbanked population.

Slovakia's decision to amend its constitution reflects a proactive approach to preserve financial autonomy and protect citizens' rights to use cash for transactions. By enshrining these rights, Slovakia aims to safeguard its economic independence and maintain a diverse payment landscape that includes both traditional cash and digital alternatives.

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