Australia is currently experiencing a surge in the circulation of banknotes, reaching a remarkable $103.7 billion, as revealed by the latest data from the Reserve Bank of Australia (RBA). This figure is approaching the all-time high of $103.99 billion recorded in December 2022. According to Jason Bryce, the founder of Cash Welcome, a pro-cash advocacy group, the physical cash in circulation has rarely been greater.
Despite this increase, the actual usage of cash for everyday transactions has declined, with only 9 to 26 per cent of notes being used as intended. A notable portion of banknotes—between 55 to 80 per cent—are believed to be hoarded rather than spent. The RBA’s analysis indicates this trend might be driven by a desire for security, as Australians seek to maintain a tangible reserve of wealth amid concerns about electronic payment systems and potential disruptions.
Interestingly, the demand for higher denomination notes, such as $50 and $100, has outpaced that of lower denominations like $5 and $10. While the latter have seen a modest annual increase since 2007, the former have jumped by about 5 per cent per year, suggesting a shift toward hoarding rather than regular spending.
Findings from a 2022 RBA survey revealed that 60 per cent of respondents did not hold cash outside their wallets, pointing to a significant divide between those who embrace cash and those who prefer digital transactions. This divide is also visible among different demographics; younger generations tend to favour cashless options, while older individuals often see the practicality of having cash on hand.
The current climate, shaped by the COVID-19 pandemic and concerns over cyber attacks on financial institutions, has heightened awareness of the vulnerabilities associated with cashless transactions. Associate Professor Andrew Grant from the University of Sydney has noted that experiences of previous payment outages and social unrest during the pandemic have contributed to a cautious attitude towards electronic reliance, prompting some to safeguard cash as a fallback option.
Ultimately, the landscape of cash in Australia showcases a split in public sentiment, with a clear distinction between notable cash advocates and an increasingly digital-oriented younger generation. This ongoing debate highlights the evolving role of cash in contemporary society, especially amid fears of unforeseen economic disruptions and the lingering memories of pandemic-induced panic buying.