The end of cash has been heralded for years — largely by government officials eager to end the expense of minting coins and printing banknotes while pushing transactions into digital forms that can be tracked and taxed. This shift has been met with varying degrees of acceptance or resistance by people around the world. But Australians appear to be rushing towards a cashless world.
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Disappearing banknotes and coins
“Cash was once a major component of the economy, but it has quickly become a thing of the past,” said an April SBSNews report on the evolution of Australia’s finances. “Just ten years ago, more than half of all transactions were in cash. Now just seven percent One, and the incidence is alarming.”
Digital payments in various forms now account for the lion’s share of transactions, an increasing number of merchants now refuse to accept coins and banknotes, and ATMs are disappearing across the country. This means that cash is increasingly difficult to find and use, even for those who prefer physical currency.
COVID-19 has accelerated this shift as people stay away from any form of contact. But the use of cash has fallen sharply, from nearly 70% of transactions in 2007 to less than 30% in 2019, according to the Reserve Bank of Australia. % of all consumer payments by 2022,” the bank found.
While Australian consumers and central bank bureaucrats welcome the shift, there are serious drawbacks to a fully digital economy.
SBSNews warns: “Digital payments have flaws, including reliance on the internet, which can be problematic in times of crisis.” The report describes the plight of people unable to access processing services due to communications outages caused by wildfires; those with cash still Necessities can be purchased.
Digital transactions also require people to have accounts in their own names, which can be a challenge for young people and immigrants. Budgeting is easier using paper and coins than abstract numbers.
The article does not mention any concerns about losing independence when all transactions can be monitored and possibly blocked. But this is a major problem elsewhere.
“Freedom of Printing”
In 2015, German economist Lars Feld, responding to Germany’s push to abolish physical cash, described physical currency this way: “freedom of printing.” He defended banknotes and coins on the grounds that people “should have the right to escape total state control,” as Hardy Graupner of German broadcaster Deutsche Welle said.
Such concerns came to a head in 2022 when the Canadian government cut off Freedom Riders protesters’ access to their bank accounts and blocked digital donations to their cause.
David Sacks, former chief operating officer of PayPal, commented: “This is a Western version of China’s social credit system. It does not completely prohibit political dissent, but the cost is so high that it becomes impractical for ordinary citizens. Practically. He has warned that electronic payment processors are working with governments to deny access to the financial system on ideological grounds.
Canada’s crackdown has been intense, but not isolated.
Digital Transactions and Targeted Industries
2022, american banker “A new code for identifying credit card firearms and ammunition sales has been approved by the International Standards Organization, creating a potential way for card networks to help law enforcement agencies identify suspicious firearms and ammunition sales,” the report said.
The financial industry “paused” implementation amid concerns that banks would help government officials track gun owners and several states banning gun-specific commercial codes.
The business code controversy is reminiscent of earlier government efforts under programs such as Operation Choke Point to cut off businesses that politicians disliked from financial services.
A 2014 report by the House Oversight Committee concluded: “The Justice Department launched ‘Operation Suffocation’ to ‘kill’ companies the government deemed ‘high risk’ or objectionable, even though they were actually legitimate businesses.” The wide range of industries affected, including firearms and ammunition sales, adult entertainment, check cashing and payday lending, raises serious concerns about the targeting and scope of Operation Choke Point.”
Notably, physical currency offers a workaround for businesses that government officials don’t like. Until now, marijuana has been primarily a cash business for businesses that were legal at the state level but remained illegal under federal law — a serious concern for heavily regulated financial institutions. Cash may not always be ideal for pot growers and suppliers (it’s a target for thieves), but it provides the freedom to operate.
use it or lose it
It is because of this concern that Germany’s Lars Feld describes physical currency as “freedom of printing.” It also inspired Swiss activists last year to urge their compatriots to vote “for a free and independent Swiss currency in coins and banknotes”. Swiss officials rejected the initiative as not being specific enough, but they also pledged to enshrine protections for cash in the constitution.
Many Australians seem to think differently, and they’re not alone. Denmark stopped printing and minting krona in 2016 due to a sharp drop in demand for cash (private companies will be commissioned to produce more krona based on demand).
“One of the reasons why it is no longer profitable to produce coins and banknotes in Denmark is that Danes increasingly pay with credit cards or mobile phones,” BT reported at the time.
There’s no denying that digital trading can sometimes be easy also Easy – all it takes is a card or app and no paper in your wallet is enough. But while the promise of Bitcoin and other online currencies remains largely unfulfilled, most digital transactions leave a record and require third-party processing. These intermediaries, under political pressure, can turn our own funds into instruments of control. The more accustomed we become to digital payments, the more likely it is that physical money and the freedom it provides will disappear.
“If you don’t use it, you lose it,” Steve Worthington from Swinburne University’s School of Business, Law and Entrepreneurship told SBS News. “The less we have access to and the ability to use cash, the more likely we are to lose the ability to use cash just like paper checks.”
Here’s something to consider the next time you head to the store to make a purchase.
