Greece Government Approves New Strategy To Ban Cash

The financial situation in Greece is not improving by any means, as new regulation imposes even more restrictions. Cash purchase limits have been reduced, and significant transactions must be completed with a payment card.

Greece imposes More Financial Guidelines

People who have been following the financial news over the past year will be well aware of how the situation in Greece is very dire. Although the ECB will bail out the country through a significant financial care package, economic reforms have to be taken care in Greece. Unfortunately for citizens, this means several changes not everyone will agree with.

First of all the limit for cash transactions has been reduced once again. Where consumers and enterprises could spend up to 1,500 euros in cash before, they will now be limited to 500 euros. This is a significant decrease, but not a complete surprise considering how most countries around the world are trying to reduce large cash transactions.

Secondly, all transactions above the amount of 500 euros will need to be paid for with either a credit or debit card. To a lot of people, this seems incredibly strange, but it also makes a lot of sense. Banks have a cash flow issue, which is why citizens have been limited to withdrawing small amounts of money from bank ATMs for quite some time now.

Credit and debit card transactions are numbers in a database moving from account A to account B. This system makes it a lot easier for banks to conduct payments, as they do not have to deal with cash payments in the form of bills. Plus, given the delay in clearing these transactions, it gives banks some “breathing room” between payments.

But the biggest change comes in the form of how consumers are forced to prove 10% of their yearly expenses through additional documentation. Moreover, receipts from cash purchases do not count towards this cap, which forces even more payment card usage. Not something most consumers are looking forward to, that much is certain.

Bitcoin would be able to alleviate some of these concerns, but it would not do much to tackle the “proving expenses” part by any means. However, it appears as if the Greek government is targeting cash payments directly, and allows other payment methods to roam freely. An unusual situation that will keep evolving over the next few months.

Source: Newsit

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