Governments have started a war on cash!
The war on cash began in February 2016, when The European Central Bank said it was considering withdrawing 500 euro notes because of an “increased conviction in world public opinion that such high-value notes are used for criminal purposes”. This statement started the ball rolling…
At 10 p.m. on 8 November 2016, India’s Prime Minister Narendra Modi announced that at midnight all 500 and 1000 rupee notes, 86% of the currency in circulation, would cease to be legal tender. These notes could be exchanged at the banks until the 31 December 2016. This shock announcement caused chaos in India and many are still reeling.
Venezuela followed India however, President Nicolas Maduro said Venezuelans don’t have to stop using 100 bolivar notes until 20 January 2017 as there is a delay in the printing of the new notes.
As reported by Bloomberg, UBS analysts think Australia should follow the same path.
“Removing large denomination notes in Australia would be good for the economy and good for the banks,” UBS analysts led by Jonathan Mott said in a note to clients. Benefits would include reduced crime and welfare fraud, increased tax revenue and a “spike” in bank deposits, he said.
In Australia, 92 percent of all currency by value is in A$50 ($38) and A$100 notes, the larger of which is “rarely seen,” according to the UBS report. Removing bigger denominations would boost digital payments in a country where the use of cash payments is continuing to fall, the analysts wrote.
Since 2009, ATM transactions in Australia have fallen 3.4 percent a year, while credit-card transactions have increased 7.3 percent a year, UBS said.
The program would also be positive for banks. If all the A$100 notes were deposited into accounts at the lenders, household deposits would rise by about 4 percent, the UBS analysts said. That would likely be enough to fill the big banks’ regulatory-mandated net stable funding ratios and reduce reliance on offshore funding, they said.” ZeroHedge
Localbitcoins volume growth in Australia is growing… steadily upwards!
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The Currency Wars and Bitcoin’s Neutrality
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