Opinion of the European Central Bank of 12 November 2021 on the obligation to accept cash payments (CON/2021/32)
Date: 2021-11-12
Institutions: European Central Bank
Subjects: money

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 12 November 2021  

on the obligation to accept cash payments 

(CON/2021/32) 

Introduction and legal basis 

On  20  October  2021,  the  European  Central  Bank  (ECB)  received  a  request  from  the  Danish  Financial 

Supervisory Authority for an opinion on a draft law amending the Law on financial services, the Law on 

capital markets, the Law on payments, and various other laws 1 (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 European Union (TFEU) and the first, second and third indents of Article 2(1) of Council 

Decision  98/415/EC2,  as  the  draft  law  relates  to  currency  matters,  means  of  payment,  and  Danmarks 

Nationalbank.  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  The  draft  law  proposes  to  regulate  the  so-called  ‘cash  rule’  under  the  Law  on  payments,  which 

obliges payment recipients to accept payments in cash. Under the current cash rule, vendors are 

obliged to accept payments in cash in the case of physical transactions, except for narrowly defined 

cases. These are distance sales, such as sales via the internet, and sales via self-service vending 

machines, which are exempt from the cash rule. Moreover, in areas with a particularly high risk of 

robberies,  the  cash  rule  only  applies  between  the  hours  of  06:00  and  20:00  provided  that  the 

Financial Supervisory Authority has been notified in advance of the intention not to apply the cash 

rule. The obligation to notify is a purely administrative measure and does not imply that the vendor 

obtains an authorisation from the Financial Supervisory Authority 3. 

1.2  The draft law proposes to restrict the cash rule by allowing payment recipients to derogate from the 

cash rule in respect of payments from payers who are not consumers. In this context it is left to the 

parties’ freedom of contract to agree the means of payment applicable. According to the explanatory 

1  

2  

3  

Forslag til lov om ændring af lov om finansiel virksomhed, lov om kapitalmarkeder, lov om investeringsforeninger m.v. 
og flere andre love. 
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). 
The  legal tender  status  of  Danish kroner  banknotes  and  coins is  laid  down in  Article  8.2 of  the Law  on  Danmarks 
Nationalbank (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 1969 og § 16 i lov 
nr. 579 af 1. juni 2010) and Article 4.1 of the Law on coins (Lov om mønter, Lov nr. 1803 af 12. december 2018). Thus, 
the cash rule under the Law on payments is a separate statutory obligation.  

 
 
 
 
 
ECB-PUBLIC 

notes on the draft law 4, the proposal seeks to balance the need to avoid unnecessary burdens on 

professional payment recipients, whilst maintaining the right for consumers to pay by means of cash. 

Moreover,  the  restriction  applies  only  for  a  specific  individual  transaction,  and  therefore  not,  for 

example, where the payment recipient also sells products or services to consumers. The explanatory 

notes  explain  further  that,  although  Danish  people  use  less  cash  than  before,  there  are  still 

consumers who need to be able to pay by means of cash, for which reason the preservation of the 

general  obligation  to  receive  cash  as  a  means  of  payment  is  appropriate.  However,  these 

considerations are not considered pertinent for payments between professionals.  

1.3  The  draft  law  contains  a  further  proposal  to  restrict  the  cash  rule  as  regards  payment  recipients 

participating  in  festivals,  town  celebrations  and  similar  events  of  a  temporary  nature5.  For  such 

events the acceptance of cash may be refused if the following cumulative conditions are fulfilled: (a) 

the event has a maximum duration of 14 days; (b) the event takes place not more than once a year; 

(c) the event takes place within a geographically limited area subject to access controls; and (d) the 

event organiser informs consumers of the cash restriction in a clear manner prior to their registration 

for the event. Where no registration is required, the event marketing must inform consumers of the 

cash  restriction  in  a  clear  manner.  The  proposed  rule  disapplies  the  cash  rule  requiring  the 

acceptance of cash. However, this does not mean that such events are prevented from accepting 

cash if they so wish. According to the explanatory notes6, based on his existing restrictive authority 

to  grant  dispensations  from  the  cash  rule,  the  Minister  for  Business  has  developed  a  practice 

whereby payment recipients who participate in an event with a short duration, taking place not more 

than once a year, and located within a limited area, can be authorised to derogate from the cash 

rule7.  The  explanatory  notes  further  explain8  that  the  draft  law  thus  codifies  the  administrative 

practice developed by the Minister, without making material amendments to the cash rule itself. The 

advantage  is  considered  to  be  the  administrative  relief  for  professionals  taking  part  in  events, 

festivals, etc., who will no longer have to apply for a derogation from the cash rule if they wish to 

restrict the acceptance of cash during all hours of the day. The explanatory notes emphasise that 

recurring events, such as football matches in a stadium or events in concert halls, are not included 

in the scope of the new restriction.  

1.4  According to the explanatory notes to the draft law9, the provisions regulating cash free payments 

during  the  evening  and  at  night  have  proven  to  work  in  accordance  with  the  policy  intention. 

Nonetheless, the draft law proposes to abolish the obligation to notify the supervisory authority of the 

intention  to  apply  reduced  hours  of  cash  acceptance,  i.e.  from  06:00  to  20:00,  in  areas  with  a 

4  
5  
6  
7  

8  
9  

See points 1 and 2.10.1 of the general comments and page 124 of the specific comments on the draft law. 
See paragraph 1.3 of Opinion CON/2021/18. All ECB opinions are published on EUR-Lex. 

See point 2.10.1 of the general comments on the draft law.  
According  to  point  2.10.1  of  the  general  comments on  the  draft  law,  the  authorisation  to  make  dispensations  was 
delegated to the Financial Supervisory Authority in 2020, which since then has exercised that power in accordance 
with the practice developed by the Minister. 
See page 124 of the specific comments on the draft law. 

See point 2.10.1 of the general comments on the draft law. 

2 

 
ECB-PUBLIC 

particularly  high  risk  of  robberies,  without  amending  the  cash  rule  as  such10.  According  to  the 

explanatory notes 11, the proposal is made with a view to easing the administrative burdens linked to 

the obligation to notify the supervisory authority in advance of the intention to apply restricted hours 

during which cash must be accepted as a means of payment.  

1.5  Finally, the draft law also makes proposals on the designation of national competent authorities as a 

consequence  of  Regulation  (EU)  2021/23  of  the  European  Parliament  and  of  the  Council12  on  a 

framework for the recovery and resolution of central counterparties and expands the competence of, 

inter  alia,  Danmarks  Nationalbank  to  impose  public  administrative  fines  on  persons  and  entities 

operating registered payment systems under the Law on capital markets 13.  

2. 

General observations  

Role and importance of cash payments in society 

2.1  Electronic payment instruments are increasingly used as the preferred form for retail payments in a 

number of  Member  States, including  Denmark 14. In this respect, Denmark  is currently among the 

most digitalised countries in the world15, 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 trades in Denmark, the figure in 2019 was down to 16%16. 

2.2  Cash continues to play an important role in society. The ability to pay in cash remains particularly 

important for those who, for various legitimate reasons, prefer to use cash rather than other payment 

instruments, or do not have access to the banking system and electronic means of payments. Cash 

is generally also useful as a payment instrument because it is widely accepted, fast and facilitates 

control over the payer’s spending. Moreover, it is the only payment instrument that allows citizens to 

settle a transaction in central bank money, which is also settled instantly 17. In addition, 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 

others with limited or no access to digital payment services18. However, the use of cash is declining 

10  

11  
12  

13  
14  
15  

16  
17  

18  

For  a  list  of  areas  identified  by  the  Ministry  of  Business  as  representing  a  particularly  high  risk  for  robberies  see: 
https://em.dk/nyhedsarkiv/2017/november/nye-regler-goer-det-nemmere-for-butikker-at-beskytte-sig-mod-roeveri/. 
For a list of entities that have notified the Financial Supervisory Authority that they intend to receive cash only during 
restricted hours, see:  
https://www.finanstilsynet.dk/Lovgivning/Information-om-udvalgte-tilsynsomraader/Betalingstjenester-og-e-
penge/Kontantreglen 
See point 2.10.1 of the general comments on the draft law. 
Regulation (EU) 2021/23 of the European Parliament and of the Council of 16 December 2020 on a framework for the 
recovery and resolution of central counterparties and amending Regulations (EU) No 1095/2010, (EU) No 648/2012, 
(EU)  No  600/2014,  (EU)  No  806/2014  and  (EU)  2015/2365  and  Directives  2002/47/EC,  2004/25/EC,  2007/36/EC, 
2014/59/EU and (EU) 2017/1132 (OJ L 22, 22.1.2021, p. 1). 
Lov om kapitalmarkeder, lovbekendtgørelse nr. 377 af 2. april 2020.  

See paragraph 2.4 of CON/2020/33.  
See the report by Danmarks Nationalbank ‘Danes primarily opt for electronic payment solutions’, September 2020, 
page 2.  
See the report by Danmarks Nationalbank ‘Cash payments are declining’, February 2020, page 9.  

See  paragraph  2.4  of  Opinion  CON/2017/8;  paragraph  2.1  of  Opinion  CON/2019/41;  paragraph  9.2.1  of  Opinion 
CON/2020/13;  paragraph  2.3  of  Opinion  CON/2020/21;  paragraph  7.2.1  of  Opinion  CON/2021/9;  paragraph  2.1  of 
CON/2021/18.  

See paragraph 1.5 of Opinion CON/2019/41. 

3 

 
 
ECB-PUBLIC 

in  Denmark,  also  by  elderly  people.  Cash  payments  as  a  share  of  the  total  number  of  payments 

broken down by age shows that in 2017 people in the age group 70-79 years used cash in 40% of 

their payments in physical trades, and that this number had declined to 22% in 201919. Taking this 

into  account,  the  ECB  has  a  positive  view  of  further  innovation  and  development  in  the  field  of 

electronic payment instruments, recalling that cash has a unique role, facilitating the inclusion of the 

entire  population  in  the  economy  by  allowing  financial  transactions  to  be  settled  in  this  way. 

Furthermore, cash could play an important role in the event of a disturbance in the payment system 20 

and it is robust against cyber-crime. In a crisis situation, such as the ongoing COVID-19 pandemic, 

the non-acceptance of cash at physical points of sale may be of particular significance to the elderly 

and people with disabilities, or anyone unable to access cashless means of payment, and who, as a 

consequence, could face serious difficulties meeting their essential needs. 

2.3  Against this background, the ECB strongly welcomes the fact that the draft law upholds the cash rule 

in Denmark, and thereby preserves citizens' right to pay in cash. 

Status of euro banknotes and coins as legal tender 

2.4  Denmark is a Member State with a derogation from participating in the third stage of economic and 

monetary union21. Although Union law only regulates the legal tender status of euro banknotes and 

coins, the Union framework applicable to the legal tender status of euro banknotes and coins will 

become directly applicable in Denmark if and when the euro is introduced in Denmark. Against this 

specific institutional backdrop, the ECB has prepared an assessment of the draft law’s provisions 

compared with relevant practices in the euro area, in particular as concerns the legal tender status 

of euro banknotes. 

2.5  Under the TFEU, the European System of Central Banks (ESCB) has the basic task of promoting 

the smooth operation of payment systems 22, and the ECB has the exclusive right to authorise the 

issue of euro banknotes within the Union23. 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 euro area 24. 

2.6  The  concept  of  ‘legal  tender’  of  a  means  of  payment  denominated  in  a  currency  unit  has  been 

considered by the Court of Justice of the European Union. In particular, the Court has clarified that 

the concept of ‘legal tender’ signifies that this specific means of payment cannot generally be refused 

in settlement of a debt, denominated in the same currency unit at its full face value, with the effect of 

discharging the debt. In clarifying the concept of ‘legal tender’ under Union law, the Court has taken 

into  consideration  Commission  Recommendation  2010/191  of  22  March  2010  on  the  scope  and 

effects  of  legal  tender  of  euro  banknotes  and  coins 25,  which  provides  useful  guidance  for  the 

interpretation of the relevant provisions of Union law. Point 1 of Recommendation 2010/191 states 

that, where a payment obligation exists, the legal tender of euro banknotes and coins should imply 

19  
20  

21  
22  
23  
24  
25  

See the report by Danmarks Nationalbank ‘Cash payments are declining’, February 2020, page 9.  
See  paragraph  2.1  of  Opinion  CON/2019/41;  paragraph  9.2.1  of  Opinion  CON/2020/13  and  paragraph  2.3  of 
CON/2021/18. 
See Protocol (No 16) to the TFEU on certain provisions relating to Denmark.  
Article 127(2) TFEU and Article 3.1 of the Statute of the ESCB and the ECB. 
First sentence of Article 128(1) TFEU and first sentence of Article 16 of the Statute of the ESCB and the ECB. 
Third sentence of Article 128(1) TFEU and third sentence of Article 16 of the Statute of the ESCB and the ECB. 
OJ L 83, 30.3.2010, p. 70. 

4 

 
ECB-PUBLIC 

(a) mandatory acceptance of those banknotes and coins; (b) their acceptance at full face value; and 

(c) their power to discharge from payment obligations. According to the Court, this shows that the 

concept of ‘legal tender’ encompasses, inter alia, an obligation in principle to accept banknotes and 

coins denominated in euro for payment purposes 26. 

2.7 

Insofar as it allows the Union legislature to lay down the measures necessary for the use of the euro 

as  the  single  currency,  the  Court  clarified  that  Article  133  of  the  Treaty  empowers  the  Union 

legislature alone to specify the legal rules governing the status of legal tender accorded to banknotes 

and coins denominated in  euro, insofar as that is necessary for the use of the euro as the single 

currency. Such exclusive competence precludes any competence on the part of the Member States 

in  the  matter,  unless  they  have  been  empowered  by  the  European  Union  to  do  so  or  for  the 

implementation of Union acts27.  

2.8  However, the Court further clarified that the status of legal tender calls only for acceptance in principle 

of banknotes and coins denominated in euro as a means of payment, not for absolute acceptance. 

The  Union’s  exclusive  competence  in  matters  of  monetary  policy  is  without  prejudice  to  the 

competence of the Member States whose currency is the euro to regulate the procedures for settling 

pecuniary obligations, which do not affect the principle that, as a general rule, it must be possible to 

discharge  a  payment  obligation  in  cash.  Thus,  that  exclusive  competence  does  not  prevent  a 

Member State from adopting a measure falling within one of the Member State’s competences; for 

instance,  a  Member  State  can,  based  on  its  competence  to  regulate  administrative  procedures, 

oblige  the  public  administration  to  accept  cash  payments  from  citizens.  Neither  does  it  prevent  a 

Member  State,  in  the  exercise  of  its  own  powers,  from  introducing,  on  legitimate  public  interest 

grounds, a derogation from that obligation for statutorily imposed payments, subject to compliance 

with  certain  conditions.  In  particular,  the  obligation  to  accept  euro  banknotes  and  coins  can,  in 

principle, be restricted by the Member States for reasons of public interest and subject to the principle 

of proportionality. This means that any such restrictions need to be proportionate to the public interest 

objective pursued. When limiting the possibility, recognised by Union law, of generally discharging a 

payment obligation in banknotes and coins denominated in euro, Member States must ensure that 

any measures comply with the principle of proportionality, which requires in particular that they are 

appropriate for achieving the legitimate objectives pursued by the legislation at issue and do not go 

beyond  what  is  necessary  in  order  to  achieve  those  objectives 28.  The  Court  has  established  that 

restrictions of the legal tender status of euro banknotes in particular require (i) that the legislation 

does not have the object or effect of establishing legal rules governing the status of legal tender of 

euro banknotes; (ii) that it does not lead, in law or in fact, to abolition of those banknotes, in particular 

by calling into question the possibility, as a general rule, of discharging a payment obligation in cash; 

(iii) that it has been adopted for reasons of public interest; (iv) that the limitation on payments in cash 

26  

27  

28  

See  judgment  of  the  Court  of  Justice  of  26  January  2021,  Hessischer  Rundfunk,  C-422/19  and  C-423/19, 
ECLI:EU:C:2021:63, paragraphs 46 to 49. 
See  judgment  of  the  Court  of  Justice  of  26  January  2021,  Hessischer  Rundfunk,  C-422/19  and  C-423/19, 
ECLI:EU:C:2021:63, paragraphs 50 to 52. 
See  judgment  of  the  Court  of  Justice  of  26  January  2021,  Hessischer  Rundfunk,  C-422/19  and  C-423/19, 
ECLI:EU:C:2021:63, paragraphs 55 to 56 and 67 to 70. 

5 

 
ECB-PUBLIC 

which the legislation entails is appropriate for attaining the public interest objective pursued; and (v) 

that it does not go beyond what is necessary in order to achieve that objective 29.  

2.9  The ECB has provided additional guidance in its opinions with respect to whether limitations may be 

considered to be proportionate. In particular, the ECB has noted 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. When considering whether a limitation is proportionate, the 

adverse impact of the limitation in question and whether alternative measures could be adopted that 

would fulfil the relevant objective with a less adverse impact should always be considered30.  

2.10  Taking into account the foregoing, the ECB considers that the draft law neither has the object nor 

the effect of amending the legal rules governing the status of legal tender of Danish kroner banknotes 

or coins, but on the contrary preserves citizens’ right to fulfil their payment obligations by means of 

cash. Moreover, as regards the requirement that the measures must be appropriate for attaining the 

public interest objective pursued, the ECB considers it a legitimate interest to create a legal basis 

allowing professionals in transactions they are conducting among themselves to opt, as part of their 

contractual freedom, for non-cash payment forms.  

2.11 

In the present context, the ECB observes that the restrictions  introduced by the draft law are not 

absolute. However, the Court has highlighted that lawful alternative means of payment need to be 

readily accessible to everyone liable to pay 31, and therefore hinted to the need for exceptions if the 

latter is not the case. With that in mind, the ECB considers the draft law in general to be proportionate 

noting, however, that as regards all provisions restricting the general rule facilitating payment in cash, 

in the case of contingencies where alternative means of payment are temporarily not functioning, 

flexibility should be ensured to facilitate settlement of payment obligations in cash.  

This opinion will be published on EUR-Lex.  

Done at Frankfurt am Main, 12 November 2021. 

[signed] 

The President of the ECB 

Christine LAGARDE 

29  

30  
31  

See  judgment  of  the  Court  of  Justice  of  26  January  2021,  Hessischer  Rundfunk,  C-422/19  and  C-423/19, 
ECLI:EU:C:2021:63, paragraph 78. 
See paragraph 2.7 of Opinion CON/2017/8. 
See  judgment  of  the  Court  of  Justice  of  26  January  2021,  Hessischer  Rundfunk,  C-422/19  and  C-423/19, 
ECLI:EU:C:2021:63, paragraph 77. 

6