(Australian Associated Press)
Demand for cash in many countries is rising despite the increasing use of digital payments technologies, a senior Reserve Bank of Australia official says.
While alternate payment methods such as mobile and digital wallets are gain popularity, any transition to a cashless society is far from certain and likely to be a slow one, RBA assistant governor Lindsay Boulton said on Tuesday.
“Whatever the endpoint – less cash or cashless – the journey is likely to be a steady walk rather than a quick sprint,” Mr Boulton told the High Security Printing Asia conference in Melbourne.
Cash transactions, despite losing some ground to the convenience of non-cash payment methods, still offer anonymity, instantaneousness and a tangible element that gives confidence, Mr Boulton said.
Cash remains the payment method of choice, particularly in regions such as the Asia-Pacific.
Mr Boulton said the amount of cash circulating in China has grown around five per cent annually over a four year period – a time when Chinese consumers have undertaken a dramatic uptake of electronic forms of payment.
Mr Boulton said cash was now being hoarded as a precautionary back up or as a safety net in countries around the world.
“There is, in fact, only one country in the world – Sweden – where the transaction demand for cash is in retreat,” he said.
The future of money may actually be a hybrid of cash and technology, Mr Boulton said, with central banks requiring notes to have security features that can be easily seen or scanned with a smartphone for verification.
THE CURRENT STATE OF CURRENCY
* The amount of circulated currency among all International Monetary Fund (IMF) countries is growing at nine per cent a year.
* China uses 30,000 tonnes of banknote polymer – the plastic base used to make notes – each year – accounting for 30 per cent of total global consumption.
* China, India and Indonesia have a combined demand for banknote polymer of 55,000 tonnes a year – 55 per cent of global consumption
*The Australian $5 banknote has an estimated lifespan of around 31/2 years
* The Australian $50 banknote – the largest circulation note by volume -has an estimated average lifespan of around 10 years.
Source: RBA assistant governor Lindsay Boulton’s speech: “Security Printing: A Central Banker’s Perspective”