Head of the Turin Micromarket for Banca Popolare di Milano and, recently, head of the Moncalieri branch, Gianni Simiand is the subject of our monthly interview, this time dedicated to the topic of cash management.

Despite political and regulatory efforts, it seems that some resistance to digital payments persists. In a certain sense, it seems Italians like cash. What's the current situation?

According to the OECD, the European Union, the Italian Revenue Agency, Tax Research, and Transparency, Italy is a highly corrupt country, and all investigations into the world of procurement demonstrate that bribes are often paid in the form of banknotes. Drug dealing, oil smuggling, and counterfeit goods thrive on cash. Discouraging its use is a duty, if only because it hampers illicit activities and contributes to a more just society.
In Europe, Italians hold a sad record: we are the biggest tax evaders. According to conservative estimates from the Ministry of Economy and Finance, we lose around €101 billion a year in revenue. We lead the underground economy, which notoriously relies on cash: according to ISTAT, it's a €208 billion market, on which not a single euro in taxes has been paid. This widespread and meticulous tax evasion could be curbed by us citizens simply by changing our habits and starting to pay for everything by debit card, credit card, bank transfer, check, or one of the many traceable methods. Giving up that hidden discount would benefit the economy as a whole. Ours is essentially a problem of mentality. I'm certain, however, that if we could make it more convenient to pay €100 with an invoice than €80 without, we could change course.

The abolition of cash, therefore, brings many benefits: not only does it force everyone to pay taxes, thereby reducing tax evasion, but it also allows for a reduction in crime and corruption.
Governments around the world are taking action to reduce the use of cash. Recent news in the United States suggests that Marvin Goodfriend, an American professor and expert in monetary policy, stated that, should an economic crisis recur, the Federal Reserve should apply interest rates below zero to encourage people to spend money. The reaction, however, would be to withdraw money from banks "and put it under the mattress." To make it less convenient to hoard cash, Goodfriend has several measures in mind: first, abolishing paper money; second, imposing a penalty on cash withdrawals from banks, commensurate with any negative interest rates set by the central bank. Third, replacing paper money with electronic money, a sort of ATM issued by the central bank, which, however, requires significant investment in banking infrastructure and payment systems.

The topic is obviously highly controversial, but there's no doubt that central banks will have to come up with some ideas in the event of a future recession, given that their current tools may not be sufficient to address the new challenges. Encouraging investment can help create a more prosperous world for everyone.

What are the duties of a cash handler? What are the new requirements, obligations, and requirements established by the new Bank of Italy regulations?
Regarding cash management, it's worth remembering that euro banknotes and coins are used within the Union by over 300 million citizens, and that 10-20% in value terms is used outside the area. Given the importance of our currency globally, the ECB has deemed it necessary to safeguard our image, including by paying attention to the quality of the banknotes in circulation.
In addition to meeting local demand by ensuring high quality standards in the services offered (banknote production, distribution, and withdrawal), the Bank of Italy must act to protect currency in circulation by combating counterfeiting and ensuring its quality. To do this, it must make the cash circuit reliable and efficient, overseeing the recycling activities performed by its operators.
The provision of 22 June 2016 provides what is necessary to correctly and comprehensively implement the Central Bank's wishes, specifying in the annex to the provision the essential characteristics that banknotes must have in order to be reintroduced into the circuit.
Since quality control would be difficult to perform correctly if performed by humans, special machines subjected to strict quality controls (a list of which is available on the Bank of Italy's website) are used to identify and separate "worthy" banknotes from counterfeit and damaged ones.
The instructions regarding the various levels of control are precise. Particular attention must be paid to where the various banknotes are stored to eliminate the risk of reintroducing banknotes destined for waste into the circulation.
In this regard, training plays a crucial role. It is essential to update and train employees and ensure that everyone, based on their specific job, is aware of what needs to be done to comply with the Bank of Italy's new regulations.

Check digitization: what changes for cash handlers?
Legislative Decree 70/2011, converted into Law 106/2011, has amended the Cheque Law in recent years by establishing that bank and cashier's cheques can be presented for payment in both paper and electronic form.
This change has led the banking system to self-regulate and only accept electronic presentations for payment (including checks negotiated directly at the drawee counter). To enable this, electronic copies legally replace the originals from which they are drawn, if conformity with the original is ensured by the negotiating bank via a digital signature and in compliance with the technical rules defined in the implementing regulations of the Ministry of Economy and Finance and the Bank of Italy.
The new system recognizes the validity of a protest or equivalent electronic notification on a check presented for payment electronically, and conserves the electronic copy in accordance with the law.
The new procedure (CIT – Check Image Truncation, which banks must adopt starting March 31) enables the exchange between banks of images generated by scanning paper securities. It should be noted that dematerialization applies to all euro-denominated securities drawn on or issued by an Italian branch of an Italian or foreign intermediary and traded in the Italian Republic.
The purpose of the new regulation is to introduce a new interbank procedure that simplifies check processing. The determining factor is the amount: up to €8.000, only the data is transmitted; above that threshold, the image of the check is transmitted. Another effect is the cessation of use of the Room for checks covered by the regulation, eliminating the risks associated with mailing.