The Daily Mail named the four banks as National Australia Bank, Commonwealth Bank, ANZ and Westpac. While "special centers" will be designated to accommodate "more complex banking needs including cash," the overarching objective is to gradually eliminate paper money altogether. This, in turn, would nudge the public toward a fully digital monetary system.
The Australian government, in partnership with the Reserve Bank of Australia (RBA), has undertaken a comprehensive beta test to examine the viability of a cashless system over the past year. As the trial period nears its end, Australian policymakers are poised to accelerate the implementation of the envisioned cashless model. This model focuses on creating a seamless and secure digital infrastructure that could handle different financial transactions. (Related: Australia launches CBDC test program, complete with carbon credit trading.)
Moreover, the Bank for International Settlements has collaborated with Canberra and provided insights into the potential benefits and consequences of a digital currency framework. Pilot programs conducted alongside industry giants like Mastercard have also contributed to refining strategies for a smooth transition.
Writing for the Big Smoke, freelance journalist Sonia Hickey noted how Canberra used the Wuhan coronavirus (COVID-19) pandemic to wean Australians into going digital. At that time, many shops in Australia preferred card payments over cash. Thus, the pandemic accelerated the digital banking revolution by approximately five years.
Cash became largely obsolete practically overnight at the height of the pandemic. Everyone – including those who weren't tech-savvy – was forced to rely on the internet for work, education, shopping and socializing. This newfound comfort with the online world has expedited Australia's path to a cashless society.
However, this shift to CBDCs raises concerns for vulnerable populations. Homeless individuals without reliable online access face challenges surviving without physical currency. Similarly, those escaping domestic violence situations often depend on cash to gain autonomy from abusive partners who controlled household finances. The elderly, many of whom lack digital devices, could struggle to access funds deposited electronically.
The move toward a cashless society also triggers privacy concerns. Digital transactions are traceable, raising debates about surveillance and data access. Additionally, technology glitches and security breaches pose risks – as demonstrated by instances of banks facing technical outages and service disruptions.
The shift also comes with heightened cybersecurity risks. As more transactions occur online, the risk for cyber-crimes such as identity theft and fraudulent activities increases.
Professor Eswar Prasad, a former International Monetary Fund official, delivered a sobering analysis of the potential ramifications during a recent gathering of global leaders. Speaking at the Annual Meeting of the New Champions, also known as "Summer Davos," Prasad underscored the authority that CBDCs could grant un-elected figures. This, he warned, would allow them to exert control over society's financial decisions – including determining which purchases are acceptable.
While proponents argue that CBDCs could provide greater financial accessibility and convenience, critics fear that it could lead to an era of "technocratic authoritarianism." In this form of authoritarianism, privacy in financial transactions becomes a thing of the past – with both banks and governments exerting increased control over citizens' finances.
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Watch this video discussing the possibility of having a"cashless society" in Australia.