The Italian Minister Council continues to wage its war on cash, with the latest ratification lowering the maximum allowed amount for cash payments. This could lead to the rise of Bitcoin in the country.
The current officials are cracking down on cash usage and have lowered the maximum threshold for cash payments from €3,000 to €2,000 starting 2020 and 1,000 Euros onward from 2022.
In their movement to make Italy cashless, the new provision also includes penalties of 30 Euros for retailers who refuse to accept payments by credit or debit card. The motivation behind the newly adopted measures includes well-known reasons like the minimization of tax evasion and the abolishment of the informal economy.
These types of measures do represent additional obstacles for individuals that may engage in tax-evading schemes but are definitely not making it impossible.
The War Against Cash
However, the more pertinent narrative seems to be that governments are trying to limit cash usage in order to maintain control over money and how its citizens are allowed to use it. Cash is the ultimate form of private money – anyone can use it in a direct and simple transaction, without it being traced or restricted.
With an ever-increasing limitation on cash, people will be basically forced to hold and use the digital form of money, which is generally held at banks, fintech and payments companies. In a world where every transaction must be electronic and traceable, the influence of big banks, corporations, tech firms, and governments over the flow of money will be unlimited.
The insistence on eliminating cash is also in line with the European Central Bank’s plans to introduce negative interest rates. This has been a controversial topic among experts and many believe this represents a dangerous policy for the economy. Nevertheless, as long as cash exists, there’s no way of preventing depositors from taking their money out of the bank and storing it away from the erosive effects of negative interest rates.
Bitcoin the Lifeboat
Born as a response to the irresponsible monetary policy management from governments, Bitcoin is looking increasingly more attractive as a form of money. As a cryptocurrency, the asset allows its users to do what they can with cash and more – make any transaction with anyone, can be made untraceable and even has a global reach.
In the past year, governments have paid attention to what digital currencies can achieve and many have initiated their own development. The European Union is considering issuing a central bank digital currency; whereas the Chinese central bank is set to already pilot its own version of a digital currency.
The wrestle for power is evident, and central banks don’t want to lose their grip over the money supply. Should the governments’ control over every individual’s funds and savings cross an unacceptable threshold, there is a lifeboat in Bitcoin for everyone.
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