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I wonder how central bank digital currencies will play into this. E.g. for the digital Euro, the ECB intends it to be included under legal tender [0] laws makin

I wonder how central bank digital currencies will play into this. E.g. for the digital Euro, the ECB intends it to be included under legal tender [0] laws making acceptance of digital cash mandatory wherever you can pay in cash (i.e. every physical POS). I expect most digital wallets to be made obsolete by such a measure, because most of the use of a digital wallet as described by the post is easy, nearly free digital transactions by end-users. Everything else can be done using your regular bank account. An ECB-backed alternative to Paypal, Venmo, Cash App et al. would certainly be more trustworthy to citizens and the compulsory acceptance by merchants will artifically solve the chicken-egg problem that most such private companies have. Ditto for debit cards, which would pose a threat to Visa and Mastercard. I'm curious what kind of ecosystem will exist around CBDCs. [0]: https://finance.ec.europa.eu/digital-finance/digital-euro/frequently-asked-questions-digital-euro-and-legal-tender-cash_en https://finance.ec.europa.eu/digital-finance/digital-euro/fr...

mcgin 2y ago
This is a common misconception around the definition of legal tender. A shop is perfectly within their rights to refuse to sell you something if you are not willing to use their accepted payment methods. Legal tender simply means they can't sue you if you offer to settle their debt using a legal tender currency. If they have refused to sell you the item, there is no debt, therefore no obligation to accept any particular instrument https://www.bankofengland.co.uk/explainers/what-is-legal-tender https://www.bankofengland.co.uk/explainers/what-is-legal-ten...
- julkali 2y ago
  While that may be legally the case right now, the EU explicitly intends to limit this practice. E.g. in the proposal on the legal tender of cash published last year by the Commission [0], which will also apply to the digital euro, it mandates: "To ensure the effectiveness of the legal tender of cash, this Regulation applies also to ex ante unilateral exclusion of payments in cash and to the access to cash", where ex ante unilateral exclusion of payments is defined as "a situation when a retailer or service provider unilaterally excludes cash as a payment method for example by introducing a ‘no cash’ sign. In this case, the payer and payee do not freely agree to a means of payment for a purchase;" In Article 7, the regulation requires that member states monitor this practice and, if it undermines the intention of the legal tender (i.e. merchants must sell you goods for cash), they shall apply "remedial measures". Also: IANAL, but at least in Germany, implied-in-fact contracts render the contract of purchase "signed" the moment you receive the good over the counter from the merchant. If you haven't payed by then, you are in debt to the merchant and from what I would say, the legal tender rules apply. [0] https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM%3A2023%3A364%3AFIN https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM%3A20...

mcgin 2y ago

This is a common misconception around the definition of legal tender. A shop is perfectly within their rights to refuse to sell you something if you are not willing to use their accepted payment methods. Legal tender simply means they can't sue you if you offer to settle their debt using a legal tender currency. If they have refused to sell you the item, there is no debt, therefore no obligation to accept any particular instrument https://www.bankofengland.co.uk/explainers/what-is-legal-tender https://www.bankofengland.co.uk/explainers/what-is-legal-ten...

julkali 2y ago
While that may be legally the case right now, the EU explicitly intends to limit this practice. E.g. in the proposal on the legal tender of cash published last year by the Commission [0], which will also apply to the digital euro, it mandates: "To ensure the effectiveness of the legal tender of cash, this Regulation applies also to ex ante unilateral exclusion of payments in cash and to the access to cash", where ex ante unilateral exclusion of payments is defined as "a situation when a retailer or service provider unilaterally excludes cash as a payment method for example by introducing a ‘no cash’ sign. In this case, the payer and payee do not freely agree to a means of payment for a purchase;" In Article 7, the regulation requires that member states monitor this practice and, if it undermines the intention of the legal tender (i.e. merchants must sell you goods for cash), they shall apply "remedial measures". Also: IANAL, but at least in Germany, implied-in-fact contracts render the contract of purchase "signed" the moment you receive the good over the counter from the merchant. If you haven't payed by then, you are in debt to the merchant and from what I would say, the legal tender rules apply. [0] https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM%3A2023%3A364%3AFIN https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM%3A20...