Australia Poised For A Cashless World

Cheques will be phased out soon, says Reserve Bank of Australia governor Philip Lowe. The Federal Government considers imposing tougher penalties on cash economy activity.

Cash To Cashless World

The Australian Treasury has come to agree that there’s the inevitable future of a cashless economy. Treasury released a discussion paper in November on whether the Australian Taxation Office (ATO) should be given greater powers to apprehend cash economy cheats. It says the power could include increasing penalties against the alleged black economy activity as well as providing the ATO straightforward and direct access to telecommunications metadata.

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The document proposes the ATO be given access to third-party information, including data from banks. That will serve as evidence to prove “low to mid-range black economy criminal offenses”. Currently, the ATO has had to rely on the Australian Federal Police (AFP) to issue and execute search warrants on banks and other third-party institutions.

Australia Cashless World

The paper also proposed that the Federal Government should consider using tools such as internet scraping. This tactic is currently in use by German tax authorities to identify potentially high-risk transactions. However, it might use for preventing money laundering through the internet.

The paper, which will be out for consultation on December 21, also recommends giving the ATO telecommunications metadata like telephone numbers, name and address details, and call records.

Speaking at the Australian Payments Summit in Sydney, Reserve Bank of Australia (RBA) governor Philip Lowe, said that the cashless economy speculations had become a reality. Additionally, that the government will need to impose tighter measures to monitor the activities of the new economy.

The paper suggests a couple of penalties as measures to fight the black economy. It says sanction such as visa forfeiture and travel bans for individuals; while for companies, preclusion from bidding on government procurement contracts.

Australia going towards cashless world

The Rise of Electronic Payments

This proposal to introduce greater penalties against cash economy activity comes as Australia moves towards a cashless world.

“It looks like a turning point has been reached. It is now easier to conceive of a world in which banknotes using relatively few payments; that cash becomes a niche payment instrument,” Mr. Lowe said.

The apex bank in Australia says Australians now make, on average, nearly 500 electronic payments a year. That’s a significant increase from around 100 per year since the turn of this century. Moreover, Mr. Low said this trend is likely to continue.

He proposed that the government could think of winding up the cheque system, “given the high fixed costs involved in operating the system,” Mr. Lowe explained. “We have not reached that point yet, but it may not be too far away.”

RBA Considering A ‘Digital Identity.’

One of the priorities of the bank is to create a digital identity for its citizens. “Digital identity is likely to become increasingly important as more and more activity takes place online,” he said.

As the RBA pursues a digital identity, the Australian government has another agency that is developing a national blockchain. Moreover, this solution will allow businesses to carry out transactions based on smart legal contracts.

The research arm of The Commonwealth Scientific and Industrial Research Organization (CSIRO) is Data61. They are working with law firm Herbert Smith Freehills and IBM to start a pilot for a new platform- the Australian National Blockchain (ANB).

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Akeredolu Feranmi

Akeredolu is a guest author at coinpedia. He explores and writes about crypto coins, the latest updates, and more.

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