The Death of Cash has been greatly exaggerated
The Morrison government’s ‘cash ban’ on transactions over $10,000 is dead. And so is the general view from much of the media commentariat that cash’s days are numbered. Below is an interview with Martin North from Digital Finance Analytics on the importance of cash.
Protecting cash is not about protecting the black market. Criminals have moved online already and banks and regulators have so far failed to keep up. Cash is about ordinary people remaining in control of their money. Cash makes budgeting easier while card spending, or simply tapping your phone can seem all too easy. Money can be spent without really appreciating what is being handed over. Plus information is also changing hands and somewhere your transactions are being recorded and that information is used. In fact your transaction information is a commodity that is bought and sold to advertisers and others who mine it for their own purposes.
Cash is safe, private, reliable and surcharge-free. Without cash, the economy is weaker because retailers and consumers are vulnerable to bank system outages, internet connectivity problems and significant fees.
The good news is that a turning point seems to have been reached. Cash withdrawals are trending up and there is now more cash on issue than ever before. The RBA has confirmed the role of cash in the economy. Other democracies have moved to enshrine cash and access to cash as a right for their citizens moving forward.
Europe, the USA, Japan and New Zealand have all recently moved to protect their citizens’s right to cash. At the other end of the spectrum, China is removing cash from the economy, introducing a digital currency and a social credit system that is partly based on transaction histories.