FRANKFURT (Reuters) - German central banker Carl-Ludwig Thiele cited economic data, freedom of choice and even Russian novelist Fyodor Dostoyevsky in a passionate defence of banknotes and coins, rejecting the rising concept of a “cashless society”.
With ever more people shopping online and using credit cards, debit cards and smartphones to pay bills, it is little wonder the idea of doing away with cash altogether has emerged.
Thiele, who oversees cash management and payment and settlement systems at the Bundesbank, would have none of it.
“Abolishing cash would hurt consumer sovereignty — the free choice of citizens about their payment instruments,” he said in Gmund in southern Germany, according to a text of a speech released by the Bundesbank on Wednesday.
“Government agencies do not have the right to tell citizens how they should pay.”
The concept of a cashless world has influential proponents such as Harvard professor Kenneth Rogoff, who has argued it would give central banks a freer hand in moving interest rates into negative territory by preventing investors switching back into cash.
On Wednesday, Denmark proposed ending next year the obligation for selected retailers to accept cash payments, in a move that would take Germany’s northern neighbour one step closer to such a cashless economy.
Thiele said cash was still used in nearly 80 percent of transactions, while the value of that cash accounted for 53 percent of all money exchanged.
Thiele’s fellow countrymen in general are traditionally less inclined to use credit cards than west European neighbours.
Cash, said Thiele, is and would remain the preferred payment method for some consumers, offering simplicity, security and speed they sought.
“Each person chooses the instrument that best meets the requirements in their eyes. As Dostoyevsky said in 1861: ‘Money is coined liberty’.”
Reporting by Hugh Lawson; editing by Ralph Boulton