Interesting article in AFR today about Australia and cash:
Cash is still king as RBA launches revamped $10 note
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Reserve Bank assistant governor Lindsay Boulton with the new $10 note. Louise Kennerley
by
Misa Han
Two hundred million new $10 notes will progressively be released from Wednesday to meet the public's ongoing appetite for cash as a store of wealth, even as consumers are increasingly moving towards card for everyday transactions.
Like
last year's new $5 notes, the new $10 note has anti-counterfeit features including a clear top-to-bottom window and a fluorescent bird and year of print which can be seen under UV light.
It also has a tactile feature so it can be recognised by the vision impaired.
However, in many ways the banknote will remain the same to avoid confusion. The new $10 note is the same colour and size as the old one and on each side of the note will still have the faces of prominent writers Dame Mary Gilmore and Banjo Paterson.
"Our focus has been on striking a balance between improving the security features on the note and not making so many changes that they're unrecognisable. Our main concern is building public confidence in the notes as a store of value," Reserve Bank assistant governor Lindsay Boulton said.
The old $10 notes will continue to be used alongside the new $10 notes, but they will be progressively withdrawn from circulation. Old notes are recycled to make items such as plastic furniture.
Mr Boulton said the release of $5 and $10 were "warm up" to the big launch of the new $50 note, which is the most commonly used banknote, in late 2018. This will be followed by the release of $20 and $100 notes.
Cash is still king
After the CBA money laundering scandal, UBS called on Australia to
remove higher denomination notes from circulation, arguing they facilitate proceeds of crime, money laundering, tax avoidance and welfare fraud.
However, Mr Boulton said the Reserve Bank had no plans to discontinue or reduce the circulation of $50 and $100 notes.
RBA's own study shows
cards have overtaken cash as the most frequently used consumer payment method for the first time, with cards accounting for 52 per cent of consumer transactions, a sign Australia is moving towards a cashless economy.
However, RBA research shows the overall demand for cash, measured by the total value of banknotes in circulation, is
still increasing between 5 and 6 per cent every year, and there is ongoing demand for cash as a store of wealth.
"As long as the demand for cash is rising, we will make the notes available for circulation," Mr Boulton said.
Consumers may also face hiccups along the way if vending machines are not upgraded in time for the new $10 note.
Last year, the release of $5 notes caused chaos when
some vending machines, supermarket self-checkout counters and pokie machines spat out the new notes.
Mr Boulton said manufacturers of vending machines, gambling terminals and self-checkout machines have had access to the new $10 note for the past six months, as they did with the new $5 note, so they can upgrade their system.
However, Mr Boulton said it was ultimately their "business decision" to upgrade the machines to take the new $10 notes.
RBA is set to progressively release 200 million of $10 notes, which is worth $2 billion.
