The aim of this paper is to evaluate the existing regulation and banking practices affecting the possibility of individuals to use own money (if allowed). Descriptive and analytical methods are used to achieve the aim. Article 105 of Satversme guarantees the rights on the private property. Money being a form of property is used as saving instrument as well as etalon for evaluation of other property.
It is recognized two broad forms of money: cash (money in the form of the banknotes or coins) and cashless (digital value stored in an account). Modern society becomes cashless society due to the rapid development of digital payment methods and legal restrictions imposed on cash transactions.
To store cashless money individuals are not able to open account directly with the Bank of Latvia, hence an account shall be opened with the bank. The digital value stored in such account by its legal nature is not money, but is digitally stored claim rights toward to the bank (cashless money).
The bank has legitimated rights to abstain himself from execution of the individual’s order to use cashless money when the source of cashless money crEdīted into account is not clear. Thus, the right of withdrawal effectuated by individual in good faith depend upon decision of the bank. State regulations on the one hand guarantee rights on the money, but on the second hand limit these rights till the claim rights toward to the bank. The state guarantees 100000 EUR (most broadly) when the bank becomes a bankrupt.
The bank controls and uses money of the individual, the last uses claim rights only, but the usage of the claim rights by individuals are controlled by the bank. The State controls banks imposing penalties on the basis of the ambiguous regulation.
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