With the fervent wave of development ensconcing global economies of the world, the overwhelming goal stated by most is that of a “cashless society.”
Australia, is one such example, with the island country months from enforcing an actual ban on cash-based transactions over AUD $10,000. According to the country’s Liberal Party, beginning on 1 July 2019, all payments over the stated sum have to be made in cheques or through electronic transfers.
Despite the overarching goal of this legislation being to weed out the nation’s illicit tobacco trade, black market crime, and terrorist financing, citizens are set to bear the brunt of the cash exodus. With over 37 percent of all commercial transactions being made in cash, the switch to a cashless system will not be smooth or welcome, as many small businesses have pointed out that this ban will hurt their reserve collections which are constituted by cash alone.
Given the departure of large-scale cash-based transactions and the forced adoption of electronic payments, cryptocurrencies could thrive. Ever since the legislation was announced in May 2018, the crypto-community looked favorably towards Australia and with two months left for the ban’s eventual roll-out, the case has strengthened.
Several factors need to be examined carefully when dealing with the dichotomy of the outflow of cash and the inflow of digital money, not necessarily just crypto, as a thread on the r/Bitcoin subreddit explains.
From a purely quantitative standpoint, the purchasing power of the stated amount i.e. AUD $10,000 is not going to hold for a period of more than a couple of years or so. The impact of inflationary pressure on cash hampers its potential, unlike Bitcoin, which has a periodical protocol to cushion the inflationary effect on its halving and subsequent mining rewards reduction.
The same was pointed out by slvbtc, who stated,
“Slowly over time as inflation eats away at purchasing power it will become illegal to…