Less than a week after India’s surprise move to scrap its highest denomination cash notes, another front in the War on Cash has intensified down under in Australia.
Yesterday, banking giant UBS proposed that eliminating Australia’s $100 and $50 bills would be “good for the economy and good for the banks.”
(How convenient that a bank would propose something that’s good for banks!)
This isn’t the first time that the financial establishment has pushed for a cashless society in Australia (or anywhere else).
In September 2015, Australian bank Westpac published its “Cash Free Report”, suggesting that the country would become cashless by 2022.
In July 2016, Australian payments firm Tyro published an enormously self-serving blog post touting the benefits of a cashless society and saying, “it’s only a matter of time.”
Most notably, two days ago, Citibank announced that it was going cashless at some of its Australian branches.
The media and political establishments have chimed in as well.
In February of this year, the Sydney Morning Herald released a series of articles, some of which were written by officials from Australia’s Department of the Treasury, suggesting that eliminating cash will “save billions”, and that “moving to a cashless society is the next step for the Australian dollar”.
This is how it works.
The government, media, banks, and even academia have formed a single, unified chorus to push this idea out to consumers that “cashless” is good for everyone.
And it’s happening across the planet, from Australia to India to Europe to North America.
They’re partially right.
Going cashless probably will save a lot of money; paper currency is costly to transport in large quantities due to the need for security.
It’s also accurate to suggest that going cashless will be “good for the banks.”
As UBS pointed out yesterday, “de-monetizing” Australia’s $50 and $100 bills would force anyone holding those notes to deposit them back in the banking system.
Bank deposits would rise as a result, and consequently, so would bank profits.
Governments would benefit from a cashless society because all savings would be in the banking system, and they have full regulatory control over the banks.
Everyone benefits from a cashless society … except for you.