Opinion of the European Central Bank of 5 February 2025 on indirect participants in, and access to, payment systems, and a new exemption from the cash rule (CON/2025/4)
Date: 2025-02-05
Institutions: European Central Bank
Subjects: money

ECB-PUBLIC 

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 5 February 2025  

on indirect participants in, and access to, payment systems,  

and a new exemption from the cash rule 

(CON/2025/4) 

Introduction and legal basis 

On  6  January  2025  the  European  Central  Bank  (ECB)  received  a  request  from  the  Danish  Financial 

Supervisory Authority (FSA) for an opinion on a draft proposal amending the Law on financial services, the 

Law on managers of alternative investment funds, the Law on investment associations, the Law on money 

laundering,  the  Law  on  fund  brokers,  the  Law  on  capital  markets,  the  Law  on  payments,  the  Law  on 

insurance services and various other laws (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, Article 25.1 of the Statute of the European System of Central Banks 

and of the European Central Bank (hereinafter the ‘Statute of the ESCB’) and Article 2(1), second, third 

and fifth indents of Council Decision 98/415/EC1, as certain provisions of the draft law relate to means of 

payment, Danmarks Nationalbank and payment and settlement systems. In accordance with Article 17.5, 

first sentence, of the Rules of Procedure of the European Central Bank, the Governing Council has adopted 

this opinion. 

1. 

Purpose of the draft law 

1.1  The draft law amends a total of 24 different laws in the financial field. This opinion focuses on three 

specific proposed amendments to the Law on capital markets 2 and the Law on payments 3. 

1.2 

Indirect participants in payments and securities settlement systems  

1.2.1  The  draft  law  amends  the  definition  of  ‘indirect  participant’  in  payment  and  securities  settlement 

systems under the Law on capital markets to provide that an indirect participant may be considered 

to be a participant  if this is justified by a systemic risk, without however limiting the liability of the 

participant through which the indirect participant sends transfer orders to the system4. This provision 

transposes  an  option  under  Directive  98/26/EC  of  the  European  Parliament  and  of  the  Council5 

(hereinafter the ‘SFD’) whereby Member States may, for the purposes of this Directive, consider an 

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2  

3  
4  
5  

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). 
Lov om kapitalmarkeder, Lovbekendtgørelse nr. 198 af 26.2.2024. 

Lov om betalinger, Lov nr. 53 af 18.1.2023.  
See Section 6(9) of the draft law, amending Section 3(23) of the Law on capital markets. 
See Article 2, point (f), third paragraph, of 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). 

 
 
 
 
 
 
 
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indirect participant to be a participant where that is justified on the grounds of systemic risk, and on 

condition that the indirect participant is known to the system.    

1.2.2  According to the interpretative notes to the draft law (hereinafter the ‘interpretative notes’) , Danmarks 

Nationalbank decided in 2020 to move settlement in Danish kroner from Danmarks Nationalbank's 

own  system,  Kronos2,  to  the  ECB’s  corresponding  services,  i.e.  the  Trans-European  Automated 

Real-time Gross settlement Express Transfer system (TARGET)6. The move is planned to take place 

at Easter 2025. As a consequence, it is expected that a number of credit institutions that are today 

direct  participants  in  Danmarks  Nationalbank’s  systems  will  proceed  to  settle  their  payments  as 

indirect participants in TARGET. This entails a need for clarification of when an indirect participant 

can be considered to be a participant in a payment system or securities settlement system. So far, 

participation by indirect participants in either a payment system or a securities settlement system has 

not constituted a systemic risk, but on the basis of the expected changes in the proportion of indirect 

participants  in  payment  processing,  it  is  now  considered  appropriate  to  implement  the  relevant 

provision of the SFD.  

1.3  Access to payment systems 

1.3.1  The  Law  on  payments  currently  provides  that  the  conditions  for  access  to  payment  systems  for 

payment service providers (PSPs) must be objective, non-discriminatory and proportional, so that 

these conditions do not prevent access to a greater extent than necessary to protect against specific 

risks such as settlement risks, operational risks and business risks and to ensure the financial and 

operational stability of the payment system 7.  

1.3.2  The draft law proposes to amend this provision to provide that the conditions for access to payment 

systems for PSPs  must be objective, non-discriminatory and proportional, and that these conditions 

may not prevent access to a greater extent than is necessary to protect against specific risks such 

as settlement risks, operational risks and business risks and to secure the payment system financial 

and operational stability 8.  

1.3.3  According  to  the  interpretative  notes 9,  the  draft  law  is  designed  in  accordance  with  a  particular 

provision of the Proposal for a Regulation of the European Parliament and of the Council on payment 

services  in  the  internal  market  and  amending  Regulation  (EU)  No  1093/2010 10  (hereinafter  the 

‘proposed  regulation  on  payment  services’)  clarifying  the  duty  to  provide  access  to  payment 

systems11. Moreover, this draft amendment is proposed as a part of a package of initiatives that aim 

to secure efficient competition  in the payment  area, where amendment  of the  access to payment 

systems  is  seen  to  secure  fair  competition  terms  for  the  redemption  of,  for  example,  Dankort 

transactions 12.  In  this  respect,  the  interpretative  notes  state  that  the  duty  to  provide  access  to 

payment systems includes the party or parties that are responsible for a payment system, where that 

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7  

8  

9  

10  

11  

12  

See pages 206 and 207 of the general comments in the interpretative notes. 

See Section 64(1), first sentence, of the Law on payments.  

See Section 10(4) and (5) of the draft law, amending Section 64(1), point (1), and inserting a new sentence after 
Section 64(1), point (1), of the Law on payments.  

See page 238 of the general comments in the interpretative notes. 

COM/2023/367 final. 

See Article 31(1) and (3) of the proposed regulation on payment services. 

The Dankort is Denmark’s national payment card.  

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party or parties does not itself issue payment cards, but, for example, cooperates with banks to issue 

cards to bank customers13. The interpretative notes go on to state that the draft amendment entails 

that the payment system cannot reserve the access to sole redemption to itself 14. The Ministry of 

Business takes the view that the clarification of the legal situation in Denmark will thus correspond 

to the upcoming change in the Union, if the proposed regulation on payment services is adopted 15.   

1.4  New exemption from the cash rule  

1.4.1  The draft law16 proposes to amend the ‘cash rule’ under the Law on payments 17, which, as a general 

rule, obliges payment recipients to accept payments in cash, subject, however, to the Law on money 

laundering18,  which  contains  a  threshold  limit  for  payments  in  cash  of  15  000  Danish  kroner 

(approximately EUR 2 021). Under the currently applicable cash rule, vendors are obliged to accept 

payments in cash in respect of physical transactions, except for specifically defined cases. The latter 

include distance sales – for example, via the internet – and sales via self-service vending machines 19. 

Moreover, in areas with a particularly high risk of robberies, the cash rule only applies between the 

hours of 06:00 and 20:0020. Under certain conditions, the cash rule also does not apply for payment 

recipients taking part in festivals, town celebrations and similar events of a temporary nature 21. The 

cash rule can also be deviated from as regards business-to-business payments 22. In such cases it 

is left to the parties’ freedom of contract to agree on the applicable means of payment 23. 

1.4.2  The draft law introduces a new exemption to the cash rule, whereby a municipal board can grant an 

exemption from the obligation to accept payments in cash to companies and institutions that handle 

tasks in the field of children and youth, which refers to companies and institutions that mainly cater 

for  children  and  young  people  including,  inter  alia,  daycare  centres,  elementary  schools  and 

childminding programs, as well as free primary schools and post-secondary schools24. The municipal 

board must publish information detailing the institutions that have been granted such an exemption. 

Companies and institutions that have been granted an exemption are required to inform consumers 

about  this  in  a  clear  manner.  A  municipal  board  may  grant  such  exemptions  to  companies  and 

institutions in their municipality and on a regional basis. Appeals against decisions on exemptions 

may be made to the Appeals Board 25, which is an agency under the Ministry of Social Affairs and 

Housing that  decides  on  complaints,  coordinates  practices  and  carries  out  investigations  into 

developments mainly in the social and employment field. 

13  

14  
15  

16  

17   

18   
19  

20  
21  

22  
23  
24  

25  

The ECB understands that this is the case for the company Nets, which issues the Dankort.  

See page 239 of the general comments in the interpretative notes. 
See page 238 of the general comments in the interpretative notes. 

See Section 10(7) of the draft law, inserting a new Section 81(6) into the Law on payments.  

See Article 81(1) of the Law on payments.  

See Article 5(1) of the Law on money laundering, Lovbekendtgørelse nr. 807 af 21.6.2024.  
See Article 81(2) of the Law on payments.  

See Article 81(3) of the Law on payments.  
See Article 81(5) of the Law on payments.  

See Article 81(4) of the Law on payments.  
See paragraph 1.2 of Opinion CON/2021/32. All ECB opinions are published on EUR-Lex. 
See page 244 of the general comments in the interpretative notes. 

See page 146 of the specific comments in the interpretative notes. 

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1.4.3  The interpretative notes state that the individual municipal boards are responsible for the affairs of 

the municipalities and therefore have in-depth knowledge of the individual companies and institutions 

that handle tasks in the field of children and young people, as well as any special needs of the citizens 

who  use  them26.  Against  this  background  the  municipal  boards  will  be  suitable  to  assess  the 

advantages  and  disadvantages  of  granting  an  exemption  from  the  cash  rule  to  such  individual 

companies or institutions. It is argued that such an exemption should be granted to institutions and 

companies  in  the  field  of  children  and  young  people,  since  a  number  of  municipalities  have 

implemented digital payment solutions in this field to ensure that staff and users –  i.e. children, young 

people and their parents – do not need to handle cash. An exemption from the cash rule will ensure 

that  these  companies  and  institutions  are  not  obliged  to  keep  cash  boxes  etc.,  which  can  ease 

burdens and create greater security for staff and users, who are children, young people and their 

parents. The interpretative notes also explain that, in order not to treat private institutions in the field 

of children and young people differently from municipal institutions and companies, the exemption 

scheme  should  include  such  private  institutions  as  they  are  comparable  to  those  municipal 

institutions and companies. Moreover, when granting an exemption, the municipal boards will have 

to  weigh  up  safety  and  costs  considerations  against  the  consideration  of  citizens’  opportunity  to 

access the services provided by the companies and institutions concerned. The municipal boards 

will thus have to consider that the exemptions do not hinder the citizens’ access to the institution or 

company, for instance because a citizen does not have access to electronic means of payment 27. 

2. 

General observations  

2.1 

In view of the notice given to the Council by the Danish Government on 3 November 1993, Denmark 

has an exemption from participating in the third stage of economic and monetary union. The effect 

of  this  exemption  is  that  all  articles  and  provisions  of  the  Treaties  and  the  Statute  of  the  ESCB 

referring  to  a  derogation  are  applicable  to  Denmark.  As  for  the  abrogation  of  the  exemption,  the 

procedure referred to in Article 140 of the Treaty on the abrogation of derogations of the Member 

States fulfilling the necessary conditions regarding the achievement of economic and monetary union 

are only to be initiated at the request of Denmark 28. 

2.2 

In accordance with Article 42.2 of the Statute of the ESCB, Danmarks Nationalbank retains its powers 

in the field of monetary policy according to national law. However, Article 131 of the Treaty and Article 

14.1 of the Statute of the ESCB, in accordance with Article 139(2) of the Treaty and Article 42.1 of 

the  Statute  of  the  ESCB,  also  apply  to  Denmark,  so  that  Denmark  is  required  to  ensure  that  its 

national legislation, including Danmarks Nationalbank’s statutes, is compatible with the Treaties and 

the Statute of the ESCB. Furthermore, as Article 130 of the Treaty, and Article 7 and Article 14.2 of 

the Statute of the ESCB, in accordance with Article 139(2) of the Treaty and Articles 42.1 and 42.4 

of the Statute of the ESCB, also apply to Denmark, Danish legislation must also fulfil the requirements 

of central bank independence29.  

26  
27   
28  
29   

See page 245 of the general comments in the interpretative notes.  
See page 245 of the general comments in the interpretative notes.  
See paragraphs 1 and 2 of Protocol (No 16) to the Treaty on certain provisions relating to Denmark.  
See page 17 of the ECB Convergence Report (June 2022), available on the ECB’s website at www.ecb.europa.eu. 

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2.3  Article 127(2), fourth indent, of the Treaty, which provides that a basic task to be carried out through 

the ESCB is to promote the smooth operation of payment systems, does not apply to Member States 

with a derogation30. In addition, Article 22 of the Statute of the ESCB, which provides that the ECB 

and the national central banks (NCBs) may provide facilities, and the ECB may make regulations, to 

ensure efficient and sound systems, does not apply to Member States with a derogation or to NCBs 

whose currency is not the euro31. Consequently, according to Article 4 of Guideline (EU) 2022/912 

(ECB/2022/8)32, the NCBs of Member States whose currency is not the euro may only connect to 
TARGET,  which  encompasses  the  real-time  gross  settlement  (RTGS)  service  T2,  owned  and 

operated  by  the  Eurosystem,  if  they  conclude  an  agreement  with  the  Eurosystem  central  banks. 

Danmarks  Nationalbank  has  concluded  such  an  agreement,  on  the  basis  of  which  TARGET-

Danmark has been established as Danmarks Nationalbank’s TARGET component system33. 

2.4  On 21 March 2024 the ECB and Danmarks Nationalbank announced34 that the ECB and Danmarks 

Nationalbank  had  signed  an  agreement  for  Denmark  to  join  the  Eurosystem’s  T2  wholesale 

payments service and the TARGET Instant Payment Settlement (TIPS) service, which are part of 

TARGET. This will facilitate the settlement of high-value payments in euro and Danish kroner in the 

T2 service and will make the Danish krone the third currency available for settlement in TIPS after 

the Swedish krona was included earlier in 2024. Danish financial market participants are concluding 

the  testing  of  both  services  in  preparation  for  the  launch  in  April  2025.  Danmarks  Nationalbank 

already  uses  the  T2  service  for  settling  payments  in  euro  and  has  been  using  the  TARGET2-

Securities (T2S) platform for settlement of securities in both euro and kroner since October 2018. 

The  inclusion  of  the  Danish  krone  in  the  Eurosystem’s  payment  services  will  enable  market 

participants  in  Denmark  to  use  all  three  TARGET  services  to  settle  all  payments  and  securities 

transactions in their national currency and to benefit from optimised liquidity management. 

2.5  The ECB takes due account in this opinion of the legal culture and legislative technique in Denmark, 

according to which legislative proposals on draft laws are accompanied by interpretative notes. The 

ECB understands that once a draft law has been adopted, the interpretative notes are of essential 

importance for the practical application of the adopted law, representing a very important tool for the 

courts to understand the intention of the legislator with respect to the adopted law, allowing the courts 

to apply the law in accordance therewith35.  

30  

31   
32  

33   

34  

35  

See Article 139(2), point (c), of the Treaty; see also Article 42.1, in conjunction with Article 3.1, fourth indent, of the 
Statute of the ESCB.  

See Articles 42.1 and 42.4 of the Statute of the ESCB.  
Guideline (EU) 2022/912 of the European Central Bank of 24 February 2022 on a new-generation Trans-European 
Automated Real-time Gross Settlement Express Transfer system (TARGET) and repealing Guideline ECB/2012/27 
(ECB/2022/8) (OJ L 163, 17.6.2022, p. 84). 

See ‘New payment systems in the pipeline’ under ‘Safe payments’ on Danmarks Nationalbank’s website at 
www.nationalbanken.dk/en/what-we-do. 

See ECB press release of 21 March 2024, ‘Denmark joins T2 and TIPS to fully integrate Danish krone in 
Eurosystem’s payment services’, available on the ECB’s website at www.ecb.europa.eu. 
See Justitsministeriets vejledning om lovkvalitet (Guide on Law Quality), p. 130, by the Ministry of Justice, available 
at www.lovkvalitet.dk (in Danish only). 

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3. 

Specific observations regarding the draft law’s provisions concerning payment and securities 

settlement systems 

3.1 

Indirect participants in payments and securities settlement systems  

3.1.1  The  ECB  understands  that  the  draft  law’s  amendment  of  the  definition  of  ‘indirect  participants’  in 

payment and securities settlement systems under the Law on capital markets is motivated by the 

imminent  migration  from  Kronos2  to  T2  and  TIPS  of  settlement  of  Danish  currency  transactions. 

While the specific accounts for such non-euro currencies are technically established and function on 

an  underlying  technical  central  liquidity  management,  RTGS  and  common  components  for 

Eurosystem  TARGET  services,  they  remain  within  the  legal  perimeter  of  the  payment  system 

operated by Danmarks Nationalbank, which is connected to T2 and TIPS via agreements concluded 

with the Eurosystem central banks in March 2024. In this respect, the migration does not have legal 

implications for the Danish participants in Danmarks Nationalbank’s systems, which will continue to 

maintain their legal relationship with Danmarks Nationalbank. 

3.1.2  However,  with  the  requirements  for  direct  participants  to  connect  to  the  European  Single  Market 

Infrastructure Gateway (ESMIG), which is the Eurosystem Single Market infrastructure gateway for 

all  users  who  want  to  access  and  communicate  with  TARGET  Services,  Danmarks  Nationalbank 

expects that a number of its current direct participants will request to become indirect participants in 

Danmarks Nationalbank’s systems. Against this backdrop, the ECB agrees that it is justified on the 

grounds of systemic risk that indirect participants are considered to be participants under the Danish 

legislation  transposing  the  SFD.  The  ECB  therefore  welcomes  the  draft  law’s  amendment  of  the 

definition of ‘indirect participants’ in payment and securities settlement systems and the enhanced 

legal clarity that this amendment will bring upon its adoption.  

3.1.3  The ECB understands that this provision in the draft law is without prejudice to the definitions and 

requirements for participation in TARGET, as set out in Guideline (EU) 2022/912 (ECB/2022/8).    

3.2  Access to payment systems 

3.2.1  Although the draft law’s amendment concerning access to payment systems purports to transpose 

certain provisions of the proposed regulation on payment services, there are, in fact, a number of 
discrepancies between the draft law and the proposed regulation on payment services. 

3.2.2  First,  the  proposed  regulation  on  payment  services  does  not  apply  to  payment  services  provided 

within  the  Union by  NCBs,  including  Danmarks  Nationalbank,  when  acting  in  their  capacity  as 

monetary authority 36. This provision is, however, not replicated in the draft law, with the consequence 

that  the  draft  law  appears  to  apply  to  Danmarks  Nationalbank 37,  including  in  connection  with 

36  See Article 2(1), point (d), of the proposed regulation on payment services. 

37  

According to the currently applicable Section 64(2), point 1, of the Law on payments, the requirements for access conditions 
do not apply to payment systems designated under the SFD, which includes TARGET-Danmark. However, the exemption is 
to be repealed with effect from 9 April 2025, cf. Section 18(3) of the Law on payments, no. 1666 of 30 December 2024, in 
line with the amendment to Article 35 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) made by 
Regulation (EU) 2024/886 Regulation (EU) 2024/886 of the European Parliament and of the Council of 13 March 2024 
amending Regulations (EU) No 260/2012 and (EU) 2021/1230 and Directives 98/26/EC and (EU) 2015/2366 as regards 
instant credit transfers in euro (OJ L, 2024/886, 19.3.2024, ELI: http://data.europa.eu/eli/reg/2024/886/oj). 

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Danmarks Nationalbank’s function, as monetary authority, to operate its component of the TARGET 

system, TARGET-Danmark.  

3.2.3  Second, the draft law has been formulated in a different manner from the proposed regulation on 

payment services, giving rise to some ambiguity as to how it is to be interpreted. In particular, while 

the  proposed  regulation  requires  payment  system  operators  to  have  in  place  objective,  non-

discriminatory, transparent and proportionate rules on access to a payment system by authorised or 

registered PSPs that are legal persons38, the draft law requires payment systems to provide PSPs 

access to their payment systems on objective, non-discriminatory and proportional conditions. It is 

unclear  whether  the  draft  law,  so  formulated,  would  require  Danmarks  Nationalbank  and  other 

payment system operators in Denmark not only to have in place objective, non-discriminatory and 

proportional  conditions  governing  access  to  their  systems,  but  would  also  place  them  under  an 

obligation to provide PSPs with access to their payment systems. In this context, it is also noted that 
the  draft  law  does  not  replicate  the  provisions  of  the  proposed  regulation  on  payment  services 39 

whereby (1) upon receiving an application for participation by a payment service provider, a payment 

system operator is to assess the relevant risks of granting the applicant payment service provider 

access to the system, (2) a payment system operator should only refuse participation to an applicant 

payment service provider where the applicant poses risks to the system, and (3) the payment system 

operator is to notify that applicant payment service provider in writing as to whether the request for 

participation is granted or refused and must provide full reasons for any refusal.  

3.2.4  As noted above, the proposed regulation on payment services has not yet been adopted by the Union 

legislator. The proposed regulation will have primacy over the draft law (once enacted) and therefore 

the draft law must be read and applied in conjunction with the regulation on payment services when 

the latter is adopted 40. Following the adoption of the proposed regulation on payment services, the 

draft law should be subject to a detailed review to ensure its compliance with the regulation 41. In this 

respect, legislating in advance of the adoption of Union legislation entails the risk that the  Danish 

legislator may need to further adapt national legislation in the event of discrepancies between Union 

and national legislation, taking account of the supremacy of Union law over national law. It is also 

noted  that  the  proposed  regulation  on  payment  services  states  that  the  Union  rules  on  payment 

services should be further harmonised, by incorporating rules governing the conduct of the payment 

services activity, including the rights and obligations of the parties involved, in a Regulation. Such 

rules should be clarified and more detailed, thus minimising margins of interpretation 42. With this in 

mind,  it  is  questionable  whether  there  is  any  national  possibility  for  Member  States  to  transpose 

provisions of the proposed regulation.  

3.2.5  In its opinion on the proposed regulation on payment services, the ECB welcomed, in principle, the 

intention of the Union legislator that payment system operators should ensure a level playing field 

for  all  PSPs  accessing  payment  systems.  The  ECB  particularly  welcomed  the  requirement  for 

payment  system  operators  across  the  Union  to  have  in  place  objective,  non-discriminatory, 

See Article 31(1) of the proposed regulation on payment services. 
See Article 31(3) of the proposed regulation on payment services. 

38  
39  
40        See paragraph 2 of Opinion CON/2014/40 and paragraph 6.4 of Opinion CON/2014/60. 
41        See paragraph 3 of Opinion CON/2014/40. 

42  

See recital 4 of the proposed regulation on payment services.  

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transparent and proportionate rules on access to a payment system, coupled with clarifications on 

admission and risk assessment procedures. However, as regards the euro area, the ECB noted that 

it should be for  the ECB to adopt the  access criteria  in respect  of  Eurosystem-operated payment 

systems, as well as the relevant conditions, including remuneration, and limits. Moreover, the ECB 

considers  that,  in  view  of  the  ESCB’s  independent  performance  of  its  basic  monetary  policy  and 

payment system tasks under Article 130 of the Treaty, the proposed requirements should not apply 

to  payment  systems  overseen  by  ESCB  central  banks.  The  reason  for  this  is  that  the  oversight 

frameworks  of  ESCB  central  banks,  which  are  currently  applicable  to  payment  systems,  already 

cater, inter alia, for non-discriminatory access to payment systems.43  

3.2.6  As previously noted by the ECB to the Danish authorities, in order for TARGET-Danmark to continue 

settling  payments  in  TARGET,  Danmarks  Nationalbank  must  be  able  to  abide  at  all  times  by  the 

access  criteria  defined  by  the  Eurosystem44.  In  addition,  as  concerns  Danmarks  Nationalbank’s 

oversight competence in respect of national payment systems45, Danmarks Nationalbank is the only 

authority that oversees Danish payment systems – a task which includes ensuring that there is fair 

and open access to such systems. Danmarks Nationalbank performs the oversight task based on 

the  international  standards  set  out  in  the  Principles  for  Financial  Market  Infrastructures46. Thus, 

Danmarks  Nationalbank  ensures  objective,  non-discriminatory  and  proportionate  access  to 

KRONOS2, TARGET-Danmark and the other payment systems established in Denmark, such as the 

retail  payment  system  operated  by  Finans  Danmark,  the  Danish  Bankers’  Association.   The  ECB 

notes  that  as  the  oversight  of  payment  systems  is  typically  a  central  bank  task,  Danmarks 

Nationalbank should be able to continue exercising this task in an independent manner. 

3.2.7  Against  this  backdrop,  the  Danish  authorities  are  invited  to  further  reflect  on  whether  and  how  to 

regulate access to payment systems, taking account of the competences of Danmarks Nationalbank.  

4. 

Specific observations regarding the draft law’s provisions concerning the cash rule 

4.1  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 Denmark 47. Cash 

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

control over the payer’s spending. It is currently the only payment instrument that allows citizens to 

settle  a  transaction  in  central  bank  money,  which  is  also  settled  instantly 48,  while,  importantly, 

43  

44  
45  

46  

47   

48  

See paragraph 2.1.6 of Opinion CON/2024/13 of the European Central Bank of 30 April 2024 on a proposed 
Regulation and Directive on payment and electronic money services (OJ C, C/2024/3869, 19.6.2024, ELI: 
http://data.europa.eu/eli/C/2024/3869/oj). 

See paragraph 4.5 of Opinion CON/2024/28. 
See Article 1 of the Law on Danmarks Nationalbank, according to which Danmarks Nationalbank must maintain a 
safe and secure currency system and facilitate and regulate the traffic in money. See also Article 212(3) of the Law 
on capital markets. 
Principles for Financial Market Infrastructures, April 2012, available on the Bank for International Settlements’ 
website at www.bis.org. 

See paragraph 2.4 of Opinion CON/2017/8, paragraph 2.4 of Opinion CON/2020/33 and paragraph 2.4 of Opinion 
CON/2024/2.   

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 
Opinion CON/2021/18, paragraph 2.1 of Opinion CON/2023/7, paragraph 2.1 of Opinion CON/2023/13 and 
paragraph 2.1 of Opinion CON/2023/39.  

8 

 
 
 
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ensuring privacy. Moreover, it does not carry the legal possibility of imposing a fee for the use thereof. 

Furthermore, cash payments are not subject to daily or weekly payment limits set by entities providing 

underlying payment services49. In addition, cash payments also facilitate the inclusion of the entire 

population in the economy by allowing citizens to settle a wide range of payment transactions in this 

way, thus ensuring freedom of choice as to the method of payment for all citizens50. The ability to 

pay in cash remains particularly important for all those citizens who, for various legitimate reasons, 

prefer  to  use  cash  due  to  its  unique  features,  rather  than  other  payment  instruments.  Also,  cash 

remains important especially for those who do not have access to the banking system and electronic 

means of payments. 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 services 51. The practical use of and handling of cash by children and young people could 

be a part of their financial education enabling them to be better equipped for their adult life, recalling 

that financial literacy means the knowledge and skills needed to make important financial decisions 52. 

The ECB surveys payment habits in the euro area biennially. The latest of these surveys revealed 

that around 60 % of the euro area citizens want to have the freedom to use cash at the point of sale53. 

Finally,  a  critical  mass  of  cash  in  circulation  is  necessary  to  maintain  the  business  case  for  third 

parties  involved  in  the  cash  cycle.  Thus,  the  imposition  of  limitations  on  cash  payment  or  the 

discontinuance of a denomination could lead to a situation in which the unit costs of cash deter third 

parties  from  continuing  to  supply  cash.  This  would  have  the  consequence  of  endangering  the 

contingency feature of cash if the cash infrastructure and cash suppliers were to disappear altogether 

or were insufficient to cater for an unexpected surge in cash demand.  

4.2  These  characteristics  of  cash  are  also  acknowledged  by  the  European  Commission  in  its  Retail 

Payments Strategy, which, while promoting the emergence of digital payments to offer more options 

to consumers, will continue to safeguard the legal tender of euro cash and the availability of central 

bank money 54. 

4.3  Against this backdrop, the ECB closely monitors any national law developments that aim to limit cash 

payment possibilities and thereby interfere with citizens’ right to pay in cash55. 

4.4  New exemption from the cash rule 

4.4.1  The purpose of the proposal for a new exemption from the cash rule under the draft law is to empower 

municipal boards to exempt companies and institutions that handle tasks in the field of children and 

youth from the obligation to accept payments in cash.  

49   
50  

51  
52  

53   

54  

55  

See paragraph 2.1 of Opinion CON/2023/39. 

See paragraphs 2.4 and 3.1 of Opinion CON/2017/8, paragraph 2.7 of Opinion CON/2017/40, paragraph 2.6 of 
Opinion CON/2019/4, paragraph 7.2.1 of Opinion CON/2021/9, paragraphs 2.1 to 2.3 of Opinion CON/2021/18, 
paragraph 2.3 of Opinion CON/2021/38, paragraph 2.1 of Opinion CON/2023/13 and paragraph 2.1 of Opinion 
CON/2023/39.   
See paragraph 1.5 of Opinion CON/2019/41 and paragraph 2.1 of Opinion CON/2023/39. 
See page headed ‘Financial literacy’ on the Commission’s website at www.commission.europa.eu. The Organisation 
for Economic Co-operation and Development (OECD) has made recommendations as to the importance of financial 
literacy skills for current and future generations of youth to help them face contemporary financial challenges, see 
‘Recommendation of the Council on Financial Literacy’, available on the OECD’s website at www.oecd.org. 
See European Central Bank, Study on the payment attitudes of consumers in the euro area (SPACE), available on 
the ECB’s website at www.ecb.europa.eu. 
See COM(2020) 592 final.  

See paragraph 2.6 of Opinion CON/2024/2. 

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4.4.2  Under the Treaty, the ECB has the exclusive right to authorise the issue of euro banknotes within 

the Union56. The euro banknotes issued by the ECB and the NCBs of the euro area are the only 

banknotes with legal tender status within the euro area57. 

4.4.3  If Denmark were to initiate an abrogation of its exemption status in accordance with Protocol (No 16) 

of the Treaty on certain provisions relating to Denmark, the draft law would enable the introduction 

of restrictions to the obligation to accept euro banknotes as a means of payment, which would be 

assessed against the relevant Union law, as set out below 58. 

4.4.4  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 59, 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 (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 60.  

4.4.5  The Court has clarified that the concept of ‘legal tender’ is a concept of Union law that must be given 

an  autonomous  and  uniform  interpretation  throughout  the  Union61.  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. In this respect, the ECB 

notes that, on 28 June 2023, the Commission published a proposal for a Regulation of the European 

Parliament  and  of  the  Council  on  the  legal  tender  of  euro  banknotes  and  coins 62  (hereinafter  the 

‘proposed  regulation  on  the  legal  tender  of  euro  cash’),  which  would  establish  rules  on  the  legal 

tender of euro banknotes and coins in binding Union secondary law. The explanatory memorandum 

to the proposed regulation on the legal tender of euro cash states that discussions within the Euro 

Tender  Expert  Group  (ELTEG)  confirmed  the  existence  of  uncertainty  and  important  differences 

regarding  the  practical  application  of  the  concept  of  legal  tender  across  the  euro  area63.  These 

56   
57  

Article 128(1), first sentence, of the Treaty and Article 16, first sentence, of the Statute of the ESCB.  
Article 128(1), third sentence, of the Treaty and Article 16, third sentence, of the Statute of the ESCB. 

See paragraph 3.1 of Opinion CON/2023/39. 

58  
59    Commission Recommendation 2010/191/EU of 22 March 2010 on the scope and effects of legal tender of euro 

60   

61  

62  
63  

banknotes and coins (OJ L 83, 30.3.2010, p. 70).  
See judgment of 26 January 2021, Hessischer Rundfunk, joined cases C-422/19 and C-423/19, ECLI:EU:C:2021:63, 
paragraphs 46 to 49.  
See judgment of 26 January 2021, Hessischer Rundfunk, joined cases C-422/19 and C-423/19, ECLI:EU:C:2021:63, 
paragraph 45. 
COM(2023) 364 final.  
See Section 3 of the explanatory memorandum to the proposed regulation on the legal tender of euro cash, and the 
Final report of the Euro Legal Tender Expert Group (ELTEG) of 6 July 2022.  

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ECB-PUBLIC 

differences would justify establishing rules on the legal tender of euro cash in a regulation adopted 

under Article 133 of the Treaty64.  

4.4.6  The Union legislature’s exclusive competence precludes any competence on the part of the Member 

States in this matter, unless they are acting on the basis that they have been  empowered by the 

Union to do so or for the implementation of Union acts 65. 

4.4.7  However, the Court further clarified that the status of legal tender calls 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  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  measures  falling  within  one  of  the  Member  State’s  competences;  for  instance,  a 

Member State may, based on its competence to organise its public administration, 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 may, 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 must 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 66. 

4.4.8  The Court has established that restrictions of the obligation to accept euro banknotes as a means of 

payment in particular require that the legislation (1) does not have the object or effect of establishing 

legal rules governing the status of legal tender of euro banknotes; (2) 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; (3) has been adopted for reasons of public interest; (4) 

only entails a limitation in on payments in cash that does not go beyond what is necessary in order 

to achieve the public interest objective67. More specifically regarding criterion number (3), on public 

interest, the Court specified that ‘the limitations on payments in notes and coins denominated in euro 

64  

65  

66  

67  

The ECB has welcomed the proposed regulation and strongly supported the establishment of rules on the legal 
tender status of euro banknotes and coins in secondary Union law, as well as the measures laid down in the 
proposed regulation regarding access to cash. See paragraphs 1.1 and 1.2 of Opinion CON/2023/31 of the 
European Central Bank of 13 October 2023 on a proposal for a regulation on the legal tender of euro banknotes and 
coins (OJ C, C/2023/1355, 1.12.2023, ELI: http://data.europa.eu/eli/C/2023/1355/oj).  

See judgment of 26 January 2021, Hessischer Rundfunk, joined cases C-422/19 and C-423/19, ECLI:EU:C:2021:63, 
paragraphs 50 to 52. 

See judgment of 26 January 2021, Hessischer Rundfunk, joined cases C-422/19 and C-423/19, ECLI:EU:C:2021:63, 
paragraphs 55 to 56 and 67 to 70. 
See judgment of 26 January 2021, Hessischer Rundfunk, joined cases C-422/19 and C-423/19, ECLI:EU:C:2021:63, 
paragraph 78. 

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ECB-PUBLIC 

may, in practice, be justified just as much on grounds of public policy relating to security or the fight 

against crime as by the public interest in ensuring the efficient organisation of payments in society’68. 

4.4.9  Regarding the proportionality of a restriction of the obligation to accept euro banknotes, the Court 

requires not only that the measure is appropriate for attaining the public interest objective pursued, 

but also that it does not go beyond what is necessary in order to achieve that objective. The ECB 

has opined on whether limitations may be considered appropriate 69. 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  pursued70.  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 considered71.  

4.4.10 The ECB notes that the draft law does not establish a cash restriction. Rather, it authorises municipal 

councils  to  introduce  cash  restrictions  by  granting  exemptions  from  the  cash  rule  to  individual 

companies or institutions. Consequently, it remains difficult to assess the draft law against the criteria 

defined by the Court and summarised in the previous paragraphs, as these criteria are designed to 

apply to specific cash restrictions. Given that the exemptions to be granted by the municipal councils 

specifically focus on payments to be made to companies and institutions that handle tasks in the field 

of children and youth, the draft law cannot be said to have the objective or the effect of amending 

the legal rules governing the status of legal tender of euro banknotes or coins. Moreover, the draft 

law does not lead, in law or in fact, to the abolition of banknotes in Denmark, in particular by calling 

into question the possibility, as a general rule, of discharging a payment obligation in cash 72. 

4.4.11 According to the explanatory notes, the draft law is proposed in order to ease burdens and create 

greater security for staff and users73. The public policy grounds relating to security and the public 

interest  in  ensuring  the  efficient  organisation  of  payments  in  society  are  in  principle  amongst  the 

legitimate  public  interest  reasons  that  the  Court  has  identified  as  justifying  a  limitation  on  the 

obligation  to  accept  cash.  The  Court  has  also  established  that,  for  a  cash  restriction  to  be 

proportionate, the measure must be appropriate for attaining the public interest objective pursued 

and not go beyond what is necessary to achieve that objective. Whether a specific exemption from 

the cash rule granted by a municipal council to certain companies and institutions pursues a public 

interest objective and is proportionate to that objective depends on the justification provided by the 

municipal council in the decision by which it will grant the exemption. In other words, given that the 

discretion under the draft law to impose concrete limitations on the use of cash  payments lies, in 

68  

69  

70  

71  

72  

73  

See judgment of 26 January 2021, Hessischer Rundfunk, joined cases C-422/19 and C-423/19, ECLI:EU:C:2021:63, 
paragraph 66. 
See paragraph 4 of Opinion CON/2022/5 of the European Central Bank of 16 February 2022 on a proposal for a 
directive and a regulation on the prevention of the use of the financial system for the purposes of money laundering 
or terrorist financing (OJ C 210, 25.5.2022, p. 15).  

See paragraph 2.7 of Opinion CON/2017/8, paragraph 2.11 of Opinion CON/2021/18 and paragraph 2.8 of Opinion 
CON/2023/39.  

See paragraph 2.7 of Opinion CON/2017/8, paragraph 2.7 of Opinion CON/2019/39 and paragraph 2.8 of Opinion 
CON/2023/39.  
See paragraph 4.6 of Opinion CON/2022/5 and paragraph 3.2 of Opinion CON/2023/39. 

See page 245 of the general comments to the interpretative notes. 

12 

 
 
practice, with the municipal boards, it is not feasible, at this time, to make any definitive conclusions 

regarding the limitations to be imposed by the municipal boards.  

ECB-PUBLIC 

This opinion will be published on EUR-Lex.  

Done at Frankfurt am Main, 5 February 2025. 

[signed] 

The President of the ECB 

Christine LAGARDE 

13