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Austria wants to engrave in its constitution the right to pay in cash while other European countries, they opt for a total dematerialization of the currency. PETER MUHLY / AFP

In Austria, the conservative ÖVV party of ex-Chancellor Sebastian Kurz has proposed to include in the Constitution the right to pay in cash, at a time when more and more countries are using virtual currencies and payments by smartphone .

Payment in cash resists in Austria. " Being able to use cash is a basic requirement for an autonomous existence ," said former Prime Minister Sebastien Kurz, campaigning for re-election in the legislative elections scheduled for late September. This announcement comes in a context where several states have already initiated a dematerialization of their currency . But can a country do without cash? Elements of answer with Philippe Moati, economist and professor of economics at the University Paris Diderot.

RFI: Why does Austria resist this dematerialisation of the currency?

Philippe Moati : I think that there is especially a sociological component to take into account. To what extent can total dematerialisation meet the aspirations of users or citizens? And there are different blocking factors depending on the country, their stories, their cultures, their habits. Austria, but also Germany, for example, are very closely related to cash by their history, their past where governments controlled everything. But in all countries today, there would be very strong resistance to the total elimination of cash .

How do you explain it?

Because cash has a very strong symbolic meaning. This is what you can wear on your body , that's what is unalterable, what can be put under the mattress, what can be carried in case of danger and in a context where, I think of the French in particular, pessimism reigns, we do not really know what will be done in the future, the liquid embodies the value of option, the possibility of dealing with the unexpected.

And the electronic money?

The electronic money is associated with the digital trace that is left and therefore the possibility of being "fliqued" in its daily life, its private life, either for strictly commercial reasons, or if one day one should have to deal with governments malicious, we would have our economic life spread out and this raises fears. So when it comes to money and more, we are at the height of the worries that it can raise.

One of the reluctance of Austrians to completely dematerialize their currency is precisely that they are attached to their private life ...

Yes, but in this case, I think it's mostly having a control over the data of his private life, because your privacy, whether you spend with your credit card, a checkbook or money, a priori, we have the same types of behavior. I say a priori because studies have shown that we are more willing to spend intangible money than material money. To summarize, spending money is always a pain because you separate from something you usually want. When we take out a note from the wallet, we are really aware of what we lost while when we put his bank card in a reader where we pay in one click on the internet, this symbol of the money that is separated becomes invisible and therefore we are more willing to spend. And an economy where money is dematerialized could lead us to consume more.

In Sweden, studies have shown that in the long run, the country should be totally cashless, dematerialization is therefore irreversible?

I think it's inevitable, we go. Each country will go at its own pace based on social acceptability, but it is part of the history of the currency. And even more with the technologies we have today. The younger generations may not have this cult of the materiality of money, on the other hand they already have the cult of the smartphone and when payment by phone will become commonplace, it will not pose any problem, especially for generations to come , to get rid of coins and notes that can still be in our pockets.

THE EXAMPLE OF AMAZONE GO

"There is no more room for liquid in an economy where all stores would work on this model since by definition everything would be completely invisible and would go through electronic signals."

The economist Philippe Moati explains Amazon Go, an example of the dematerialization of money. 26/08/2019 - by RFI Play

So it is the future generations in Austria, for example, who will decide to do without cash?

Yes, but I think anyway that the pressure of players in the banking and digital sector will push in this direction. They may already make us more expensive the use of the liquid because to supply the ATMs are hotbed of costs drowned in hotbeds of profits. And this operating expense of ATMs is something that could someday lead to billing. Therefore, if we penalize the use of the material currency and encourage the use of an electronic money, it will accelerate the movement.

Not to mention that this liquid is also the way through which the underground economy passes so governments anxious to put an end to all forms of tax fraud would certainly be very interested to remove once and for all cash.

Can a country finally do without cash?

Yes, completely. If we look at the history of money, it's a long march towards dematerialization , money is just a convention that crystallized on the physical for centuries or even millennia, but today it's already electronic writing games and eventually it could become 100% of electronic writing games. On a technical and economic level, there is absolutely no obstacle to total dematerialisation.