Abolishing cash in Europe: the benefits and drawbacks of electronic transactions

Grigorios Gikas; Alina Hyz; Periklis Tagkas

Grigorios Gikas Technological Educational Institute of Epirus
Alina Hyz Department of Accounting and Finance, Piraeus University of Applied Sciences and Postgraduate Programme on Banking, Hellenic Open University
Periklis Tagkas Department of Business Administration, Technological Educational Institute of Epirus

Abstract

Many proposals favouring cash abolition have emerged over the past few years. Their economic and social impact has not yet been analysed in depth.

This paper aims to present the evolution of the means of payment during the last decades and to analyse the issue of cash abolition in European economies. The creation of a cashless economy would bring benefits, such as efficiency increase, as well as problems: the disturbance of money supply, instability of the foreign exchange rate, and so on.

The paper discusses the reasons and arguments expressed by supporters and opponents of cash abolition and focuses on possible consequences, from the economic point of view. The advantages, disadvantages, benefits and costs associated with the possibility of removing cash from the economy are also described. Finally, a possible scenario for the future is analysed.

Keywords: Monetary Policy, Financial Markets

JEL: E44, E50

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