The COVID-19 pandemic has halved cash payments throughout Australia as health-conscious consumers shift towards digital and contactless payment options. With bank branches and ATMs set to slowly disappear, Australia is positioned to be one of the most cash-free countries in the world.
Commonwealth Bank insights indicate that Australia will be wholly cashless by 2026, ranking Australia as the 6th most cashless society in the world. A cash-free future, however, has many Australians concerned.
While a cashless economy allows for greater financial security, queuing times, more efficient taxation, and more efficient hygiene routines, opponents of the cashless revolution cite the necessity of cash transactions for the unbanked and underbanked.
Australian Government Set to Legislate Against Cash Payments
Australia’s cashless future, however, could be mandatory. Government limits on cash transactions that present the risk of prison time if violated are already in the works — in 2019, the Morrison Government proposed legislative changes that would criminalize cash transactions in excess of $10,000.
The Currency (Restrictions on the Use of Cash) Bill 2019 is yet to be finalised, but will establish four new criminal offenses that relate to cash payments that exceed $10,000 for goods or services transacted between two individuals or parties.
Notably, these offenses will apply to anybody regardless of their awareness of the new legislation, should it pass, with a maximum penalty of two years in prison and or a $25,200 fine. The core premise of the bill focuses on eliminating the “black” economy, minimizing money laundering, bribery, terrorist financing, and tax evasion.
Introducing legislation that criminalizes cash transactions over a certain amount, however, is likely to accelerate the adoption and use of cryptocurrency. The Restrictions on the Use of Cash Bill specifically refers to cryptocurrency, stating:
Crypto-currencies and other digital currencies are generally unregulated and often do not create clear records of transactions in a form that can easily be used to identify the parties to a transaction.
Cryptocurrencies a Dark Horse in the Race Towards Cashlessness
The Treasury’s Black Economy Task Force is aware of the virtually untraceable nature of cryptocurrency transactions not associated with a crypto-to-fiat bridge, noting that some non-cash payment methods, including the many cryptocurrencies which are being traded, are just as anonymous as cash.
With the COVID-19 pandemic accelerating the use of digital fiat payments and significantly contributing to the adoption and use of cryptocurrency payments, Australia is indeed transforming into a cashless society.
Whether or not the new digital payment platforms used by everyday Australians in our cashless future will resemble centralized fiat currency or decentralized cryptocurrency virtually immune to legislative control, however, remains to be seen.