Giorgia Meloni, the new right-wing prime minister of Italy, wants more transactions to be made using cash rather than electronic money.
Meloni criticized card payments as "private money" and advised customers to stop tapping in favor of transactions made with physical money.
Meloni has asserted that there is no connection between cash payments and tax evasion, citing Germany and Austria as examples of countries with no cash transaction restrictions.
However, this is about to change in both nations when the new AML standards from the European Commission generally ban cash transactions above €10,000.
Meloni's first budget will also include a provision allowing store owners and other enterprises to decline credit payments and demand cash for sums up to €60.
Additionally, it will increase the present cap of €30 and permit the sale and purchase of commodities up to €5,000 in cash instead of €1,000.
She recently informed the European Parliament: "The only legal currency in Italy and Europe is the paper notes issued by the European Central Bank. Electronic money is not legal currency — it is a form of private money."
Small companies in Italy would appreciate her efforts to bring back cash because they complain about the fee they must pay to accept credit cards.
The European Central Bank, which is concerned that the surge in plastic payments may put control of the European economies in the hands of credit card companies, has backed her distinction between "public" and "private" money.
"Today central bank money is available to the public only in the form of banknotes. Thus, in a digital world it could become marginalised as a means of payment," the bank has warned.
The introduction of a digital euro is being planned by bank officials.
The ECB thinks the digital euro will protect European economy "in the event of geopolitical tensions," but the specifics of whether Europeans will need an ECB-issued account or card to use it are still being worked out.
Meloni claimed in April that "orcing Italians to almost exclusively use electronic payments" was an "illegitimate present to the banks and financial firms that sell these services."
According to Lorenzo Codogno, a financial analyst and former employee of the Italian treasury, "Meloni is saying cash is public money, so how can we limit the use of something that is public — people must have the right to choose."
"I can understand the libertarian principle behind it but I suspect this is also linked to pressure from retailers who prefer cash because it gives them the flexibility to avoid tax," he continued.
According to Codogno, Italians avoid around €99 billion in taxes annually, which is twice the amount in northern Europe.
According to Wolfango Piccoli of the political consultancy firm Teneo, "The government is listening to groups like taxi drivers, who you can never ignore in Italy — this is a good budget for tax dodgers."
By fLEXI tEAM