2023/0208/COD: Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the legal tender of euro banknotes and coins

In view of the proposed introduction of a Digital EURO in the EU, the concurrent necessity to ensure continued access to and the acceptance of cash (banknotes and coins) within EU member states, and to ensure a uniform application of the access and acceptance requirements, the European Commission has published another draft regulation, the so-called Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the legal tender of EURO banknotes and coins.
In this draft regulation, the Commission seeks to define the meaning of „legal tender“ for EURO banknotes and coins, including the rules for access to and the acceptance of the EURO for the payment of obligations. The draft also proposes some exemption from these access and acceptance requirements and sets out rules for the monitoring of compliance by financial institutions and other market participants. It shall be noted in this context, that no regulation or directive so far has defined „legal tender“ in relation to EURO banknotes and coins.
In detail, the draft specifies
(1) the meaning of legal tender relating to EURO banknotes and coins which entails „their mandatory acceptance, at full face value, with the power to discharge from a payment obligation“ which means that all financial institutions and other market participants MUST accept the EURO as a payment method at no additional cost.
(2) two key exemptions from the acceptance requirements, namely, in case the payee and the payer have agreed on an alternative means of payment and in case, the payee cannot – on a temporary basis – provide payment services in EURO (e.g. the entity does not have sufficient change).
(3) the obligations of national competent authorities (NCAs) to monitor the acceptance of payments in cash and the access to cash and to notify the EU Commission and the European Central Bank of the results on an annual basis. Corresponding technical standards will be developed for the evaluation process and for the notification. In case of insufficient access to cash, NCAs must take remedial action and notify these actions within the annual report.
(4) the obligations of NCAs to lay down rules on penalties, including financial penalties and non-criminal fines, with respect to actions that violate the access and acceptance requirements relating to EURO cash.
(5) the interchangability of EURO coins and banknotes and the Digital EURO at par and the obligations of payees as regards the acceptance of cash when the payee also accepts the Digital EURO or when it is required to accept either one payment method.