No menu items!

Digital shifts in banking: Australia`s move toward a cashless society

Central Bank Digital Currencies (CBDCs) have sparked discussions due to concerns over trade privacy and increased control by banks and governments over individual financial transactions.

As these currencies introduce enhanced technological oversight, there is a debate about their implications for individual freedom.

Recently, Australia has been exploring the potential of CBDCs, partnering with global financial institutions and piloting programs with companies such as Mastercard.

After these trials, there is anticipation of a potential move toward a more digital currency system.

One argument is that Australia is already progressing towards a cashless society, demonstrated by the decline of cash usage from 32% to 16% over a span of three years.

However, it’s crucial to note that external events, like the 2020 pandemic, may have accelerated this trend by necessitating online transactions.

Major banks in Australia, such as ANZ, have begun limiting in-branch cash withdrawals, signaling a preference for a digital transition.

Though there will be centers designated for cash transactions, the momentum is evidently toward a digital future.

CBDCs might afford governments more immediate oversight of financial activities.

For example, limitations could be set on purchasing specific items not by outright bans but by restricting digital payments for them.

Additionally, concepts like time-sensitive CBDCs and integration with social credit systems, potentially limiting financial privileges based on online actions or statements, are being considered.

Such measures align with Australia’s demonstrated willingness to adopt strict strategies, as seen during pandemic responses, which may make the country a fitting early adopter of these digital financial tools.

Local reports emphasize the significant move to a cashless system. Yet, reports of customers struggling to withdraw cash underscore concerns about customer rights and bank obligations.

Globally, many nations, including the U.S., are examining the potential of CBDCs.

Beyond digitizing current currency, these digital currencies may offer detailed traceability and programmability, granting governments new ways to oversee and potentially control financial transactions.

To conclude, as nations like Australia lean towards digital currency adoption, it’s vital to balance the benefits of digital currencies with concerns about privacy and control.

Starting August 20th, 2023, Westpac Bank Australia has set a daily withdrawal limit of US$1000 for its customers.

ANZ, another major Australian bank, has ceased over-the-counter cash transactions in certain branches, leading to public concern and debate.

The bank cites the decision to respond to the reduced demand for in-branch transactions over the years.

Critics argue that such moves might exclude specific demographics, like seniors and the disabled, who rely on in-person banking services.

Check out our other content