92% of Europeans demand to guarantee cash payment during the negotiation of their legal protection in the EU

The European legislation on the legal tender of euro banknotes and coins (COM(2023) 364 Regulation proposal, procedure 2023/0208(COD)) is currently in the trilogue phase between the European Parliament, the Council, and the Commission. That is, the final Regulation has not yet been adopted, but both the Parliament and the Council have already set their negotiating positions.

1. Which regulation are we talking about

On 28 June 2023, the European Commission presented a Regulation proposal on the legal tender of euro banknotes and coins, which for the first time details in secondary law what exactly it means for euro cash to be “legal tender”: the scope of the acceptance obligation, access to cash, and common rules for euro area countries. The file is registered in the legislative register as 2023/0208(COD).

2. Situation in the Council of the EU

The Council reached its position (“general approach”) within the so-called “single currency package” on 19 December 2025, according to its press release Single currency: Council agrees position on the digital euro and strengthening the role of cash.

In that position, Member States generally support that:

• Euro cash continues to be widely accepted and available throughout the euro area.
• Acceptance obligations for cash are strengthened, allowing only a limited set of exceptions (e.g., certain remote payments or online operations).
• Member States must monitor access to and acceptance of cash using common and national indicators, and take corrective measures when problems are detected.
• Cash resilience plans are developed to ensure that cash payments can be maintained in case of serious failures of electronic payment means.

With this agreement, the Council is now ready to negotiate with the Parliament on the final text of the Regulation.

3. Situation in the European Parliament

The competent committee is the Economic and Monetary Affairs Committee (ECON), and the current rapporteur is Fernando Navarrete Rojas (EPP, Spain), according to the file in the European Parliament’s “legislative train” (link to the file).

Main milestones in the Parliament:

• 23 June 2026: the ECON committee adopts its report and negotiating mandate on the single currency package. For the specific legal tender of cash file, the committee approved the text by 46 votes in favor, 4 against, and 8 abstentions, according to the Parliament’s press release on the digital euro and cash package (press release 23/06/2026).
• The report strengthens, among other things, the prohibition of systematically excluding cash through “card-only” signs or general contractual clauses, and obliges States to monitor the territorial availability of cash, with special attention to elderly people, low-income households, or unbanked individuals.
• Early July 2026: the Plenary gives the green light to start negotiations with the Council, as reflected in the press release on the digital euro and single currency package (“Digital euro: MEPs ready to start negotiations”), which explicitly mentions the third file on the legal tender of euro cash.

From that moment, the Parliament has a formal mandate to negotiate with the Council and the Commission on the final text.

4. Status of the procedure and next steps

With the Council’s position of December 2025 and the Parliament’s negotiating mandate of June–July 2026, the file is in the classic phase of interinstitutional negotiations (trilogues). According to the information available in the legislative files of the Parliament and the Council, as of 14 October 2026:

• No definitive political agreement on the Regulation text has been announced yet.
• The Regulation, therefore, has not been formally adopted either by the Parliament in first reading or by the Council.
• Once an agreement is reached in trilogue, it must be reflected in a compromise text that the Parliament Plenary and the Council must formally approve, after which it will be published in the Official Journal of the EU and enter into force on the date established by the Regulation itself.

5. Political assessment

In summary, the European legislation on the legal tender of euro cash is advanced but incomplete: there is a Commission proposal, a general approach from the Council, and a negotiating mandate from the Parliament, and the three actors have expressed their willingness to strengthen the role of cash as a widely accepted payment method, complementary to the digital euro. The core of the negotiation focuses on the degree of obligation to accept cash, the admissible exceptions, and the scope of the national obligations to supervise and guarantee physical access to banknotes and coins throughout the territory.

The competences of the European Union institutions regarding payment means are based on several legal bases in the Treaties and are divided between the EU legislator (Parliament and Council, on a Commission proposal) and the European Central Bank (ECB) and the Eurosystem. Simplified, the EU has two main areas of action: the euro monetary policy and the regulation of the payment market as part of the internal market.

1. Legal basis in the Treaties: what the EU can do

The main legal bases are:

• Article 3.1.c) TFEU: exclusive competence of the EU in monetary policy for Member States whose currency is the euro. This includes the issuance of the euro and the definition of its status as legal tender in the euro area.
• Article 127 TFEU: defines the functions of the ESCB/ECB, including promoting the smooth operation of payment systems.
• Article 133 TFEU: allows adopting necessary measures for the use of the euro as a single currency, including legal aspects related to banknotes and coins.
• Articles 26 and 114 TFEU: shared competence to establish and develop the internal market. Used to harmonize rules on payment services, electronic money, cards, transfers, etc.
• Articles 53 and 56 TFEU: free provision of services and establishment, additional basis to regulate cross-border financial and payment activities.

With these bases, the EU can adopt regulations (directly applicable) and directives (to be transposed by Member States) that organize the payment ecosystem throughout the Union.

2. Competences over different types of payment means

2.1. Euro cash (banknotes and coins)

• The euro as a single currency and legal tender is determined at the EU level (monetary policy and art. 133 TFEU).
• The ECB has exclusive competence to authorize the issuance of euro banknotes and, together with national central banks, defines technical characteristics, security, and rules for circulation and withdrawal.
• The Council, on a Commission proposal and after consulting the ECB, regulates the legal aspects of euro coins (face values, issuance, basic characteristics).

Member States may regulate the practical use of cash (e.g., cash payment limits for tax or anti-money laundering reasons), provided they respect the euro’s status as legal tender established at the EU level.

2.2. Transfers, direct debits, cards, and retail payments

These instruments fall within the internal market for payment services. The EU acts mainly through harmonization legislation:

• Payment Services Directives (PSD/PSD2 and its revision), based on art. 114 TFEU, regulating who can provide payment services, access conditions, information obligations, user liability, security, etc.
• SEPA Regulation, setting technical and legal rules so that euro transfers and direct debits operate uniformly throughout the SEPA area.
• Rules on card interchange fees and other competition aspects in the payment market, again based on art. 114 TFEU and competition law.

In this area, competence is shared: the EU sets a common framework and Member States retain room for additional rules (e.g., sanctions, internal contractual aspects) as long as they do not contradict or undermine EU law.

2.3. Electronic money and digital payment means

• Electronic money (prepaid cards, e-wallets, etc.) is regulated by EU directives and regulations defining what it is, who can issue it, and under what prudential and user protection requirements.
• New digital payment means (including certain crypto-assets used as payment means) are progressively regulated at the European level through regulations such as the MiCA framework and related market infrastructure rules.
• The EU also establishes relevant horizontal rules for digital payments, such as data protection (GDPR) and cybersecurity, which condition how payment service providers can operate.

3. Institutional division of functions

• European Commission: has legislative initiative; proposes directives and regulations on payment services, electronic money, market infrastructures, etc., and ensures their correct application (infringement procedures).
• European Parliament and Council: co-legislators that approve, amend, or reject Commission proposals under the ordinary legislative procedure.
• ECB and Eurosystem: responsible for euro monetary policy, authorize and supervise cash issuance, and have a specific mandate to ensure the smooth functioning of payment systems. They also issue mandatory opinions on legislation affecting their competences.
• European supervisory authorities (especially the EBA): develop technical standards, guidelines, and standards that specify legislation on payment services and electronic money.
• Member States: transpose and apply EU legislation, designate national supervisors, and may adopt complementary rules compatible with Union law.

Overall, the EU has very broad competence to regulate payment means from two angles: ensuring the stability and uniqueness of the currency (euro) and building an integrated and secure payment market, leaving Member States limited but real room to specify and complement that framework in their own legal systems.

In the euro area, euro banknotes and coins are the only legal tender. This means that, as a general rule, they must be usable to settle debts and pay for goods and services, and that their general refusal by a shop is not lawful unless a specific and proportionate legal exception applies.

This principle derives from the Treaty on the Functioning of the EU (art. 128 TFEU) and the secondary legislation on the euro, and is reiterated by both the European Central Bank (ECB) and the Council and European Parliament. The Council recalls that cash must be “available and accepted” as a means of payment, subject only to well-structured and supervised exceptions, and the Parliament is working on a specific regulation on legal tender that strengthens the acceptance obligation and prohibits, for example, general bans through “no cash” signs.

1. General rule: obligation to accept cash

In practice, the starting point is:

• Euro cash must be accepted in principle as a means of payment for transactions in the euro area.
• Its general and unilateral refusal by a shop (e.g., a “card only” or “no cash accepted” sign) is contrary to the legal tender status unless based on a concrete legitimate cause or specific legal rule.
• Member States are obliged to ensure that cash remains accessible and accepted, and to monitor that its legal tender status is not emptied by indirect restrictions.

The European Commission and the ECB have emphasized that mere “formal” recognition of legal tender is insufficient if, in practice, access to or acceptance of cash is weakened so much that it becomes “theoretical rather than usable”: for example, if shops massively stop accepting it or if the infrastructure to obtain it disappears.

2. When can a shop legally refuse cash payment

EU law and the interpretation of the ECB and the CJEU allow a limited margin of exception. Broadly, a shop can only refuse cash if one of these conditions applies:

• Prior agreement with the customer on another payment method.
  If, before the transaction, the merchant and consumer individually agree on payment by card, transfer, or another instrument, cash use can be excluded for that specific transaction. A generic notice is not enough; it must be a genuine contractual agreement, not a unilateral imposition.
• Practical impossibility or legitimate and proportionate cause.
  The ECB accepts that there are cases where accepting cash is unreasonable: for example, objective lack of change, concrete security risks from handling large amounts of cash, or attempts to pay a tiny amount with a very high denomination banknote when the shop cannot handle the operation without serious detriment. In these cases, refusal must be justified and case by case, not a general policy.
• Operations where cash is materially incompatible.
  In fully online payments or remote services with no physical contact with the merchant, cash payment may not be viable. Hence both the Council and Parliament contemplate specific exceptions for goods or services acquired remotely and for unattended terminals.
• Restrictions set by national legislation.
  States may impose maximum limits on certain cash payments (for tax fraud or money laundering prevention) or prohibit the use of banknotes and coins for certain operations. In those cases, the merchant must refuse cash because the national law requires it, provided such restrictions respect proportionality and non-discrimination principles and do not completely empty cash acceptance.
• Very specific technical cases.
  Certain EU and State acts provide, for example, that no one is obliged to accept more than a certain number of coins in a payment, except for specific public services. Here too, refusal is limited to a type of operation, not cash in general.

3. What is not a valid requirement

By contrast, the following do not meet European standards:

• A simple “no cash accepted” or “card only” sign placed in the store.
• A shop’s “internal policy” that absolutely excludes banknotes and coins without relying on a law or an objective and proportionate justification.
• General conditions that seek to deprive cash of any possibility of use, especially for vulnerable groups that depend on it.

The Council’s negotiating mandate on the legal tender regulation goes precisely in the direction of de facto prohibiting the widespread non-acceptance of cash by retailers and service providers, leaving only limited exceptions (distance sales, unattended terminals, etc.), while the Parliament insists that “companies would not be allowed to ban cash through ‘no cash’ signs or standard contractual terms.”

4. National differences within the common framework

Within this European framework, each Member State specifies:

• Its quantitative limits on cash payments and associated sanctions.
• The inclusion of the duty to accept cash as a consumer or commercial obligation and its classification as an infringement.
• Additional exceptions, always respecting EU principles and case law.

Therefore, a shop that wants to legitimately rely on an exception must verify both the European framework (legal tender of the euro and its limits) and the national law of its country. Outside those cases, the general refusal to accept euro banknotes and coins is contrary to the current legal tender regulations on cash.