Italy restricts cash payments, will Bitcoin transactions grow?
After Greece, Italy is the next country to wage war with the desire to expand cashless culture. Specifically, with the new decision, the Council of Ministers of Italy will lower the maximum amount allowed for cash payments. Once again, will Bitcoin be paying more attention in this country?
Italy conducts cashless culture
The Italian government is trying to minimize the use of cash. The reason comes from tax evasion and the desire to abolish the informal economy. They have lowered the maximum threshold for cash payments from € 3,000 to € 2,000, starting in 2020 and € 1,000 onwards from 2022. Therefore, if retailers refuse to pay by card credit or debit card, they will be fined about € 30.
It seems the reason for reducing tax evasion is not strong enough that Italy decided to minimize extreme cash like this. It appears that the government is trying to restrict the use of cash to maintain control of money and how citizens use it. Cash is the ultimate form of private funds. Therefore, anyone can use it in a direct transaction without being monitored or restricted. However, it seems that after 2020, Italians will no longer have this freedom.
Italy is making all cash payments above 2,000€ illegal in 2020. One year later, that limit drops to 1,000€. Anyone who refuses to accept credit cards is instantly fined 30€ + 4% of the refuted amount.
The war on cash is here. Luckily, we have bitcoin.https://t.co/r6vgyq1Qev
— Bitcoin Valgardena (@btcvalgardena) December 9, 2019
As cash becomes increasingly limited, people will be forced to use digital currency. These new currencies will be owned by banks, Fintechs, and payment companies. The emphasis on cash removal is also in line with the European Central Bank’s plan to offer negative interest rates. This is a controversial topic among experts, and many believe that this is a dangerous policy for the economy. However, as long as cash exists, there is no way to prevent depositors from withdrawing from banks and storing it from the erosion of negative interest rates.
Critical improvements of @ECB approach regarding #cryptocurrencies & #stablecoins #Libra President of ECB #MarioDraghi replied to MEP Eva Kaili & recognizes future potential as means of payment while keeping an open mind for the utility of a crypto-Eurohttps://t.co/YH4l3LzGG6 pic.twitter.com/ewhzKgkXQx
— Eva Kaili (@EvaKaili) September 27, 2019
Will Bitcoin be a safe haven asset?
Bitcoin was born to fight irresponsible monetary policy management from governments. Over the past year, governments have been paying close attention to what digital currencies can achieve, and many have started to develop their own. The European Union is considering issuing a central bank digital currency (CBDC), while China’s central bank is preparing to test its digital version.
The struggle with power is evident, and central banks do not want to lose the grip on the money supply. If the government’s control of an individual’s money and savings exceeds an unacceptable threshold, there will be a lifeboat in Bitcoin for everyone.
However, there is still an old question. Will Bitcoin become more prevalent in Italy after this decision comes into effect? And will Bitcoin’s government continue to increase the tax on cryptocurrency users in Italy as Bitcoin transactions are increasing in Italy? Let’s wait and see.
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