EN ECB -PUBLIC  
 
OPINION OF THE EUROPEAN CENTRAL BANK  
of 11 December 2020  
on limitations on cash payments  
(CON/20 20/33) 
 
Introduction and legal basis  
On 9 November 2020,  the European Central Bank (ECB) received a request from  the Danish 
Finanstilsynet (Financial Supervisory Authority)  for an opinion on a draft law amending the Law on 
Danmarks Nationalbank, the Law on capital markets , the Law on measures to prevent money laundering 
and financing of terroris m, and various other laws1 (hereinafter the ‘draft law’) . 
The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the 
Functioning of the E uropean Union and the second, third, fourth and fifth indents of Article 2(1) of Council 
Decision 98/415/EC2, as the draft relates to means of payment, Danmarks Nationalbank, the collection of 
statistics , and payment and settlement systems . In accordance with the first sentence of Article 17.5 of 
the Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.  
 
1. Purpose and description of the draft law  
1.1 This opinion addresses t he three parts of the draft law which : (a) lower the existing threshold for 
certain cash payments to professionals from a maximum of 50 000 DKK to 20 000 DKK (from 
approximately EUR 6 700 to EUR 2  700); (b) ensur e that the opening of insolvency proceedings 
against a participant  in a payment or securities settlement system does  not prevent funds or 
securities available on the  participant´s  settlement account from being used to fulfil its obligations in 
the system on the day of the opening of insolvency proceedings ; and ( c) amend the Law on 
Danmarks Nationalbank3 to ensure both an enhanced legal basis for Danmarks Nationalbank’s 
collection and use of data, including for statistical purposes, and to strengthen the confidentiality 
requirements applicable to employees and members of the decision- making bodies of Danmarks 
Nationalbank, including when such data is shared with, inter alia, the ECB.  
1.2 The lowering of  the threshold for certain cash payments  applies to professionals who are not 
covered by the scope of  application of  the Law on measures to prevent money laundering and 
                                                 
1  Forslag til lov om ændring af lov om en garantifond for skadesforsikringsselskaber, lov om investeringsforeninger 
m.v., hvidvaskloven og forskellige andre love.  
2  Council Decision 98/415/EC of 29 June 1998 on the consultation of the European Central Bank by national 
authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42).  
3   Lov om Danmarks Nationalbank , Lov nr. 116 af 7. april 1936.  som ændret ved lov nr. 166 af 13. april 1938, § 44 i 
lov nr. 88 af 15. marts 1939, lov nr. 67 af 15. marts 1967, § 90 i lov nr. 174 af 30. april 1 969 og § 16 i lov nr. 579 af 
1. juni 2010.  
ECB -PUBLIC  
2 financing of terrorism4, and applies to thi s specific group of business -to-business payments and to 
customer -to-business payments. According to the explanatory notes  to the draft law5 (hereinafter 
‘explanatory notes’) , the proposal is made with a view to combating money laundering and they 
refer to recital 6 of Directive (EU) 2015/849 of the European Parliament and of the Council6 in this 
context , which provides , inter alia,  that the use of large cash payments is highly vulnerable to 
money laundering and terrorist financing, and that Member States should be able to make 
additional general limitations to the use of cash and further stricter provisions . Further, the 
explanatory notes detail how  continuous technological and digital development s have  in general 
reduced cash payments of larger amount s, therefore the lowering  of the threshold for certain cash 
payments  is expected to have a limited impact on professionals and consumers.   
1.3 The draft law also introduces the option given to Member States  under Article 4 of Directive 
98/26/EC  of the European Parliament and of the Council7, according to which the opening of 
insolvency proceedings against a participant in a payment or securities settlement system does not 
prevent funds or securities available on the participant´s settlement account from being used to 
fulfil its obligations in the system on the day of the opening of insol vency proceedings . The 
explanatory notes8 clarify that currently  and going forward , Danmarks Nationalbank provides a 
credit line (i.e. a guarantee)  for settlement s in VP Securities, the Danish national central securities 
depository . Settlements are processed either in real time or  in batches  (at fixed times during the 
day), and a  credit line  provided by  Danmarks Nationalbank  applies  to real-time and dedicated 
batch settlement in VP Securities. National insolvency law provides  that, in the case of insolvency 
proceedings opened against a participant, its settlement  account at Danmarks Nationalbank is  
frozen and t he participant is no longer able to dispos e of its funds , which Danmarks Nationalbank 
can apply by way of security int erest to secure the credit line provided. However, the explanatory 
notes state that Danmarks Nationalbank has joined TARGET2 -Securities  (hereinafter  ‘T2S’), the 
common platform for cross -border security settlements in Europe owned by the Eurosystem . T2S 
settles transactions  mostly in real time on a delivery -versus -payment (DvP) basis, i.e. the money 
and securities change hands simultaneously  and with finality in accordance with Directive 
98/26/EC . Therefore, according to the explanatory  notes , as a result of Danmarks Nationalbank’s 
affiliation to T2S , doubts have arisen as to whether settlement in T2S  is protected against the 
insolvency of a Danish participant in the course of a settlement day. In case of settlement failures 
due to insolvency in the course of a day, there is a  risk that the failure to settle will have a knock -on 
effect in the system and create problems for other participants , which may undermine confidence 
that orders are executed in the system. It is therefore seen as important to ensure that resolution 
                                                 
4  Lov om forebyggende foranstaltninger mod hvidvask of finansiering af terrorisme, Lovbekendtgørelse nr. 380 af 
2. april 2020.  
5  See point 2.13. 2 of the general comments to the draft law.  
6  Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use 
of the financial system for the purposes of money laundering or terrorist financi ng, amending Regulation (EU) 
No 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/60/EC of the European 
Parliament and of the Council and Commission Directive 2006/70/EC  (OJ, L 141, 5.6.2015, p. 73) . 
7  Directive 98/26//EC of the European Parliament and of the Council of 19 May 1998 on settlement finality in payment 
and securities settlement systems (OJ L 166,11.6.1998, p.45).   
8  See point 1.12.1 of the general comments to the draft law . 
ECB -PUBLIC  
3 can take place in the event of bankruptcy through the funds made available on Danmarks 
Nationalbank ’s dedicated settlement account. Ultimately, failure to settle due to bankruptcy is seen 
a possible c ause for mistrust in  the financial system.  
1.4 Finally, the draft law contains two amendments to the Law on Dan marks Nationalbank .  
1.5 The first amendment proposes to establish an enhanced legal basis for the Danmarks 
Nationalbank  to collect and use data for purposes falling within its fields of competence. The 
explanatory notes state that data collection undertaken today by Danmarks Nationalbank is 
understood mainly to take place with a view to produc ing statistics. According to t he draft law, 
Danish undertakings registered in the Central Business Register  will be obliged, upon request by 
Danmarks Nationalbank, to provide all data necessary for the Danmarks Nationalbank  in order for it 
to fulfill its objectives as defined in the Law on Danmarks Nationalbank . As stated in the 
explanatory notes9, the assessment of what information it is necessary to obtain from the 
undertakings will depend on Danmarks Nationalbank ’s actual performance of its task s, and the 
Danmarks Nationalbank  therefore arguably has considerable discretion to decide what data is 
relevant for the fulfilment of its objectives . According to the explanatory notes10, data will be 
collected for conclusions and decisions taken by the Danmarks Nationalbank  in relation to the 
monitoring of the Danish economy, financial stability, including credit  risk, system ic risk, the capital 
and foreign exchange market s, and the establishment of financial statistics.  
1.6 The second amendment to the Law on Danmarks Nationalb ank introduces a specific professional 
confidentiality regime  for the employees and members of the decision- making bodies of Danmarks 
Nationalbank , includ ing external  hired help, an obligation which in all cases continues to apply after 
the end of the provision of service s11. This confidentiality regime entails that thes e persons must  
keep confidential information , which  they become aware of when  executing their duties , 
confidential. In case of a breach, the Criminal Code12 applies, as a result of which fines or 
imprisonment of up to 6 months , which in case of aggr avating circumstances  can be up to 2 years , 
can be impo sed. The draft law maintains the existing rules on the transmission of confidential 
information to central banks in the European System of Central Banks ( ESCB)  and the European 
Systemic Risk Board ( ESRB) , and also introduces an exhaustive list of other domestic, European 
and international bodies and institutions, including central banks located in other European 
Economic Area ( EEA)  countr ies, to whom confidential data may be transmitted . The draft law 
further provides that  persons who receive confidential information from Danmarks Nationalbank , 
including persons at ESCB central banks,  are bound by the same professional secrecy obligation 
applicable to the employees and members of the decision -making bodies of Danmarks 
Nationalbank . According to the explanatory notes13, the performance of tasks relating to 
international statistical cooperation may also be carried out either on the basis of E uropean Union 
                                                 
9  See point 2.20.3 of the general comments to the draft law.  
10  See point 2.20.2 of the general comments to the draft law.  
11  See 20.1 to 20.3 of the amended Law on Danmarks Nationalbank ( Lov om Danmarks Nationalbank).   
12  See Sections 152 to152e of the Criminal Code, Straffeloven, Lovbekendtgørel se nr. 976 af 17. september 2019.  
13  See point 2.21.2 of the general comments to the draft law.  
ECB -PUBLIC  
4 regulations or , in the case of the Bank for I nternational Settlements  and the International Monetar y 
Fund, on the basis of  an agreement concluded with these organisations.    
 
2. Cash limitation   
2.1 The ECB notes that Denmark has an exemption from participating in the third stage of economic 
and monetary union14. Against this specific institutional backdrop, the ECB has prepared an 
assessment of the relevant provisions  of the draft law against relevant practices in the euro area, in 
particular the legal requirements for the euro and the legal tender status of euro banknotes . 
2.2 Under the Treaty, the ECB has the exclusive right to authorise the issue of euro banknotes within 
the Union15. The euro banknotes issued by the ECB and the national central banks of the euro 
area are the only banknotes with legal tender status within the Union16.  
2.3 The scope and effects of the legal tender status of euro banknotes and coins has not yet been 
defined in Union law. According to Commission Recommendation 2010/191/EU17 (hereinafter the 
‘Commission Recommendation’), the concept of legal tender of the euro should rely on three main 
elements. First, there should be a mandatory acceptance of banknotes a nd coins unless the parties 
have agreed on other means of payment. The acceptance of euro banknotes and coins as a 
means of payment in retail transactions should be the rule. A refusal to accept cash should be 
possible only if it is based on reasons relate d to the ‘good faith principle’. Second, banknotes and 
coins should be accepted at full face value. Third, banknotes and coins should have the power to 
discharge debts.  
2.4 The ECB notes that cash continues to play an important role in society  irrespective of  the fact that 
electronic payment instruments are increasingly used for retail payments in Member States, 
including Denmark18. As digital transformation progress es rapidly, Denmark is currently among the 
most digitalised countries in the world19, which , inter alia,  enables the use of alternative means of 
payment . While in 2009 cash payments accounted for 48% of the total number of payments in 
physical trade in Denmark, the 2019 figure was  down to 16%20. It is recognised, however,  that the 
ability to pay in cash remains particularly important for certain groups in society that, for various 
legitimate reasons, prefer to use cash rather than other payment instruments. These groups 
include not only elderly people but also some disabled  citizens, immigrants , socially vulnerable 
citizens , minors  and other s with limited or no access to digital payment services21. The ECB notes, 
however, that the use of cash is declining in Denmark, also e.g. by elderly people, as cash 
                                                 
14  See Protocol (No 16) to the Treaty on certain provisions relating to Denmark.  
15  Article 128(1), first sentence,  of the Treaty and Article 16, first sentence,  of the Statute of the European System of 
Central Banks and of the European Central Bank (‘Statute of the ESCB’) . 
16  Article 128(1), third sentence,  of the Treaty and Article 16, third sentence,  of the Statute of the ESCB.  
17  Commission Recommendation 2010/191/EU of 22 March 201 0 on the scope and effects of legal tender of euro 
banknotes and coins  (OJ L 83, 30.3.2010, p 70) . 
18   See paragraph 2.4 of Opinion CON/2017/8.  All ECB Opinions are published on EUR -Lex. 
19  See page 2 of Danmarks Nationalbank ’s report ‘ Danes primarily opt for electronic payment solutions ’, 
September  2020.  
20  See page 9 of Danmarks Nationalbank ’s report ‘ Cash payments are declining’ , February 2020.  
21  See paragraph 1.5 of Opinion CON/2019/41.  
ECB -PUBLIC  
5 payments as a share of the total number of payments  broken down by age shows that people in 
the age group 70-79 years in 2017 used cash in 40% of their payments  in physical trade, a number 
that had declined to 22% in 201922. Still, cash  is generally  appreciated as a payment instrument 
because it is widely accepted, fast and facilitates control over the payer’s spending. In addition,  it is 
the only payment instrument that allows citizens to settle a transaction directly, without relying on a 
third part y service provider. Furthermore, the transaction can be settled in central bank money 
instantly  and at face value, without the legal possibility of imposing a fee for the payment in 
question23, appreciating that surcharges on card payments are also now prohibited by Union law24. 
Moreover, cash payments facilitate the inclusion of the entire population in the economy  since it 
may be used to settle any type of financial transaction25. 
2.5 The Commission Recommendation states that the acceptance of payments in cash should be the 
rule, as noted above,  but acknowledges  that cash may be refused for reasons related to the good 
faith principle, without this being a breach of the legal tender status of cash. Neither Union law nor 
the Commission Recommendation explicitly addresses if and to what extent it may be permissible 
to introduce a more general limitation to the obligation to accept euro cash payments. Therefore, 
Union law has to be interpreted in order to ascertain the conditions that a limitation on payments in 
euro notes and coins must fulfil, including which condit ions should be fulfilled to comply with the 
legal tender status of euro banknotes and coins when introducing general limitations to the 
obligation to accept cash payments. In particular, with respect to limiting cash payments, recital 19 
of Council Regulat ion (EC) No 974/9826 should be taken into consideration. This recital states that 
limitations on payments in notes and coins, established by Member States for public reasons, are 
not incompatible with the status of legal tender of euro banknotes and coins, provided that other 
lawful means for the settlement of monetary debts are available. The prevention of money 
laundering and financing of terrorism qualifies as a public  reason outweighing the impact of the 
limitations on cash payments27.  
2.6 However, l imitatio ns on cash payments should also be effective and proportionate to the objectives 
pursued and should not go beyond what is necessary to achieve such objectives28. This requires, 
inter alia, that, for the settlement of monetary debts other lawful means of pay ment are available. 
These other lawful means of payment should be readily accessible to all citizens in the respective 
Member State. Any negative impact of the proposed limitations should be carefully weighed against 
the anticipated public benefits.  
                                                 
22  See page 9 of Danmarks Nationalbank ’s report ‘ Cash payments are declining’ , February 2020.  
23  See paragraph 2.1.6 of Opinion CON/2020/17.  
24  See  Article 62  of Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on 
payment services in the internal market, amending Directives 2002/65/EC, 2009/110/EC and 2013/36/EU and 
Regulation (EU) No 1093/2010, and repealing Directive 2007/64/EC  (OJ L 337, 23.12.2015, p. 35) . 
25   See paragraph 2.1.6 of Opinion CON/2020/17, paragraph 2.6 of Opinion CON/2019/4, paragraph 2.7 of Opinion 
CON/2017/40, paragraph 3.4 of Opinion CON/2017/20, and paragraph 2.8 of Opinion CON/2017/27.  
26  Council  Regulation (EC) No 974/98 of 3 May 1998 on the introduction of the euro (OJ L 139, 11.5.1998, p. 1).  
27   See paragraph 2.2 of CON/2013/9.  
28  See paragraph 2.1.5 of Opinion CON/2020/17 and paragraph 2.3 of Opinion CON/2019/4.  
ECB -PUBLIC  
6 2.7 With respect to the requirement for limitations to be proportionate, the ECB notes that the broader 
and more general a limitation is, the stricter should be the interpretation of the requirement for the 
limitation to be proportionate to the objective pursued. W hen considering whether a limitation is 
proportionate, the adverse impact of the limitation in question should always be considered and it 
should also be considered whether alternative measures could be adopted that would fulfil the 
relevant objective with a less adverse impact29.  
2.8 Finally, it is of relevance to note in this context that Directive 2014/92/EU of the European 
Parliament and of the Council30 has made it easier for Union citizens to obtain payment accounts 
and related electronic payment services as an alternative to cash31.  
2.9 In respect of the  lower ing of  the threshold for certain cash payments , the proposal  follows a 
previous reduction in the t hreshold amount in 2013 , when it was reduced  from DK K 100 000 
(approximately EUR 13 500), to the current threshold of DK K 50000.32 At the time, the ECB  noted33 
that any impact of the proposed provisions should be carefully weighed against the public benefits  
expected to be derived from them. Also,  in view of the fact that the measures affect relatively low 
value payments, competent authorities should ensure that the effects of these measures do not go 
beyond what is necessary for achieving the objective of co mbating money laundering and financing 
of terrorism . The explanatory notes do not clarify what the impact has been of the lowering of the 
threshold for certain cash payments  since its  introduc tion and adoption in 2013 . The explanatory 
notes also do not clarify  why, seven years after the l owering of the threshold for certain cash 
payments , the threshold needs to be further reduced to just around one fifth of the pre- 2013 
threshold.  
2.10 However,  the ECB acknowledges that other lawful means for the settlement of monetary debts with 
similar benefit s to those of  cash are generally available in Denmark  also above the proposed 
threshold of approximately EUR 2 700. Moreover,  as noted in paragraph 1.2, t he propos al to  
further lower the threshold for certain cash payments applies only to professionals who are not 
covered by the scope of application of the Law on measures to prevent money laundering and 
financing of terrorism , when receiving cash. Thus, the lowering of the threshold applies only to this 
specific group of business -to-business and customer -to-business payments.  In this respect , the 
ECB welcomes the fact that this restriction is not intended to apply to payments between 
consumers.  Taking this into account, and in addition to the above general observations , the 
lowering of the threshold for certain cash payments as set out in the draft law  could be deemed 
proportionate to the objectives pursued34 and to not go beyond what is necessary to achieve such 
objectives . However, the ECB cannot elaborate on the effectiveness of the dr aft law on this point, 
since no substantiation has been provided to this effect in the explanatory notes, and since the 
                                                 
29  See paragraph 2.1.5 of Opinion CON/2020/17.  
30  Directive 2014/92/EU of the European Parliament and of the Council of 23 July 2014 on the comparability of fees 
related to payment accounts, payment account switching and access to payment accounts with basic features (OJ L 
257, 28. 8.2014, p. 214).  
31  Directive 2014/92/EU has been implemented in Denmark by Law N o 375 of 27 April 2016 (Lov om betalingskonti) . 
32  See Opinion CON/2013/9.  
33  See paragraph 2.3 of Opinion CON/2013/9.  
34   See paragraph 2.5 of Opinion CON/2019/46.  
ECB -PUBLIC  
7 effect of the above 2013 reduction of the cash limitation ban has not been clarified. Also, in case of 
contingencies where alternative means of payment are temporarily not functioning, flexibility should 
be ensured for the settlement of  payment obligations in cash.   
 
3. Settlement finality in case of insolvency of system participant s 
Directive 98/26/EC is decisive for ensuring harmonised rules on irrevocability of payments and securities 
transactions  across the Unio n, thereby helping to avoid systemic risks in the financial system . The 
Directive ensures that collateral security is insulated, on the day of the insolvency of a participant in a 
system,  from the effects of the insolvency law  applicable to that participant. The ECB agrees with the 
arguments made in the explanatory notes t o the effect that the unwinding of a settlement in a securities 
settlement system may have a negative impact on the stability of financial markets and institutions in 
general , and arguably in particular for interconnected systems like T2S . The i rrevocability of transfer 
orders is a prerequisite for the smooth and efficient functioning of T2S in the event of a participant 
becom ing insolvent in the course of a settlement day . For these reasons  the ECB strongly welcomes the 
draft law’s proposed amendment s to Danish law to ensure settlement finality in case of the insolvency of 
a system participant .   
 
4. Collection and confidentiality of data  collected and shared by Danmarks Nationalbank  
4.1 The ECB welcomes the provisions of the draft law enhancing  the legal basis for the Danmarks 
Nationalbank t o collect and use data for purposes falling within its fields of competence,  including 
but not limited to the production of financial statistics . The proposed provision is formulated very 
broadly  allowing the Danmarks Nationalbank flexibility to define the required data depending on the 
task it is undertaking to fulfill its objectives.  
4.2 The ECB also welcomes that the existing  rules on the transmission of  confidential information to  
central banks in the ESCB  and the ESRB are maintained, and that the draft law extends  the 
transmission of  confidential  information to other  domestic, European and international bodies and 
institutions, including central banks located in other  EEA countries . 
 
This opinion will b e published on EUR -Lex.  
 
 
Done at Frankfurt am Main, 11 December 2020.  
 
[signed]  
 
The President of the ECB  
Christine LAGARDE