Digital cash to replace banknotes

Printed notes, polymer or paper, will not be in circulation in Australia within a decade, according to ANU expert.

With around 1.1 billion banknotes worth $53.6 billion on issue in Australia, the Reserve Bank buys its polymer-based recyclable currency from Note Printing Australia in Victoria. In 2012 it issued 129 million banknotes as replacements, 19 million fewer than the year before.

According to Professor Rabee Tourky, Director of the Australian National University (ANU) Research School of Economics, the rise of electronic currency will lead to the phasing out of physical cash in Australia within a decade.

“One of the major economic issues we have now is the emergence of this great experiment with electronic cash, such as Bitcoin,” Professor Tourky said.

“In 10 years’ time there won’t be any paper cash. The big question is what’s going to replace it in Australia? Will it be Bitcoin? I don’t think so. More likely it will be ‘AusBit’, an Australian government issued digital cash.”

Note Printing Australia, which is a subsidiary of the Reserve Bank, also prints Australian passports as well as exporting its patented polymer note technology around the world. In recent years it has been embroiled in bribery scandals in its overseas dealings. Inquiries to Note Printing Australia as to what impact such a decline in cash would have on its business drew a 'no comment.'

“It’s quite clear that the central bank in Australia is going to have to issue electronic cash,” Professor Tourky said. “It’s also going to have some issues that cash as we know it doesn’t have, such as privacy, anonymity and the perhaps the emergence of anonymous markets.”