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Slovakia embeds cash usage in constitution amid digital euro fears

As the proposal for a digital euro gains traction, Slovakia has amended its constitution to protect the right of its citizens to pay in cash.

“Everyone has the right to pay for the purchase of goods and services in cash,” says the new amendment to the constitution passed in the past week. With it, Slovak legislators hope to protect the citizens against the mandatory use of the digital euro.

The amendment was pushed through parliament by the right-wing populist Sme Rodina party. As reported by one local outlet, it received the support of 111 legislators, which makes up 75% of the house.

While it’s being touted as an alternative to cash payments by the European Central Bank (ECB), the legislators expressed concern that Slovaks could be forced to use the digital euro in the future.

“It may be initially sold as an alternative, but gradually it will become apparent that it can only be exclusive,” said one of the MPs supporting the bill. He believes the regional bank will use the CBDC “to monitor a person’s entire life.”

“It is very important that there is a provision in the Constitution based on which we can defend ourselves in the future against any orders from the outside, saying there can only be digital euro and no other payment options,” another MP stated.

While Slovakia has become the first country to implement regulations that protect citizens against the digital euro, it’s not the only country with reservations about the CBDC. Some, like Germany and Italy, have expressed concerns about bank disintermediation. Other countries like the Netherlands have taken aim at the monetary surveillance a digital euro would enable.

The ECB has previously claimed that the digital currency will have the same privacy levels as cash. It has also stated that it will allow legislators to find the balance between privacy and anti-money laundering controls. However, these assurances have done little to assuage users’ fears.

Skepticism against CBDCs isn’t limited to the EU. In Nigeria, the eNaira got off to a rough start as most Nigerians didn’t trust the country’s central bank. In the U.S., prominent leaders have opposed the digital dollar, even though the Federal Reserve has yet to commit to one. Florida Governor Ron DeSantis has even introduced legislation that bars the digital dollar from the state.

To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.

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