The Australian government may soon introduce new regulations to ensure that citizens have continued access to physical currency, despite the growing trend towards digital payments.
A report by the Council of Financial Regulators has recommended that the government be given new powers to oversee cash distribution services, following the decline in the use of cash for payments in Australia.
The Importance of Maintaining Access to Cash
About 1.5 million Australians rely on cash for four out of five in-person transactions, and it’s particularly crucial for elderly, vulnerable, regional, and rural communities.
The paper dollar serves as a vital “fallback” during natural disasters, outages, and times of uncertainty, and it’s essential to keep it circulating from cash register to cash register.
The Challenges of Cash Distribution
Cash transporter Armaguard received a $50 million bailout in 2024 from major retailers and banks to stay afloat, highlighting the challenges faced by the cash distribution sector.
Treasurer Jim Chalmers emphasized the need to review options surrounding cash distribution, recognizing the importance of maintaining access to cash.
The Future of Cash Distribution
The Council of Financial Regulators is preparing to hand down a final report later in 2025, following submissions from stakeholders.
The government’s proposed powers would enable it to set prices when agreements between cash distribution services and service providers can’t be reached, ensuring that Australians continue to have access to physical currency.