Why Bitcoin Adoption May Spike if Australia's Proposed "Cash Ban" Activates
People could be jailed for two years and fined $25,200 just for using more than $10,000 in cash in one transaction under a new bill being considered by the Australian Parliament; if passed, the bill is likely to drive citizens away from traditional financial institutions and towards decentralized cryptocurrencies like Bitcoin.
“Cash Bans” Strengthen Bank’s Grip
The Reserve Bank has said the motive for the Federal Government’s $10,000 cash limit bill is to fight the “black economy,” not to get rid of cash. This claim is facing a lot of pushback from economists to libertarians (and Bitcoin proponents) who are concerned about the control and power it will give to banks and authorities.
Matthew Lesh of Australia’s Institute of Public Affairs has said that the proposed cash ban — Currency (Restrictions on the Use of Cash) Bill 2019 — is a “disturbing breach of our right to privacy” and “an attack on the basic liberty of free exchange.”
He likened it to George Orwell’s classic novel, 1984, exploring how Big Brother uses surveillance to control citizens.
“The intention of the cash ban is to create an accessible digital record of transactions that government can monitor,” Lesh said. “This establishes a creepy precedent, foreshadowing a future in which you are only allowed to make purchases that Big Brother can watch.”
Also of note is that according to the International Monetary Fund (IMF), Australia does not have a serious black economy problem: the country has the 10th smallest black economy in the world and the size of it almost halved between 1991 and 2015.
Furthermore, according to the Citizens Electoral Council of Australia (CEC), the pretext for this law being to crack down on money laundering and tax evasion in the black economy is “a shameless lie.”
They assert that the formal recommendation for the cash ban comes from “big four” global accounting firm KPMG; the CEC sees these financial institutions as being the real criminals, calling them “accomplice[s] of the world’s biggest money launderers and tax evaders.”
Shift to Bitcoin?
The many varying criticisms of this bill certainly do highlight the shortcomings of traditional banking systems; it also begs the question, if adopted, will the bill drive Australians to cryptocurrencies like Bitcoin?
People already have the opportunity for permissionless financial inclusion: a smartphone and an internet connection enables anyone, anywhere in the world, to send or receive money with Bitcoin.
Further, cryptocurrency transactions permit for increased financial freedom as they are not tracked and traced by financial institutions — so no spending limits; and as long as users have control of the keys to their cryptocurrency addresses, no third-party has the power to take those funds away.
The Senate inquiry into the Currency (Restrictions on the Use of Cash) Bill 2019 is to hand down its report by February 7, but there will be further public hearings before then.
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