1.5bn Australian banknotes in circulation

Experts bust cash cow myth in Australia! Cash continues to prove its resilience in the face of non-believers in Australia. Certain news outlets have reported on the alleged death of a cash cow simply because of the recent success of alternative payment methods. Experts say otherwise... 

An in-depth analytical study published by the Reserve Bank of Australia concludes that the future of cash in Australia is safe. Read on... 

Excerpts

'Australian consumers have increasingly been using electronic payment methods in preference to cash for their transactions. The overall demand for cash in Australia, however, remains strong. There is ongoing demand for cash for non-transaction purposes, particularly as a store of wealth. While the role of cash in society is evolving, it is likely to remain an important feature of the payments system and economy for the foreseeable future. Moreover, the current mix of banknote denominations continues to meet community demand for a secure means of payment and store of wealth. Given the ongoing importance of cash, the Reserve Bank will maintain the public’s confidence in Australia’s banknotes by continuing to ensure that banknotes are of high quality and secure from counterfeiting...'

'Cash continues to play an important role in the Australian economy. Survey data indicate that cash accounted for 47 per cent of consumer payments (by number) in 2013 – still the most frequently used form of payment. This is nevertheless a decline from 2007 when cash accounted for 69 per cent of consumer payments (Graph 1).1 A shift away from cash – and other paper-based payment methods – towards cards and other electronic means of payment has also occurred in many other advanced economies.2 Even though the use of cash for transactions has been declining, the overall demand for cash more broadly remains strong, with the ratio of currency (which includes both banknotes and coins) to GDP rising over recent years in Australia and abroad. The Reserve Bank produces and issues Australia’s banknotes to meet public demand, while the distribution of banknotes to commercial banks...'

'The overall demand for cash – as approximated by the total value of banknotes in circulation – increased by 6 per cent over the year to November 2016, which is around its trend pace of the past few years. The value of currency in circulation has increased at a faster rate than nominal GDP in recent years and the currency-to-GDP ratio has risen to its highest level in several decades. Similar trends in currency demand have been evident in many other advanced economies (Graph 3). In the United States, for example, the value of currency in circulation is at its highest level...'

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Source:

Davies, Cassie, Mary-Alice Doyle, Chay Fisher and Samual Nightingale. December 2016. "The Future of Cash." Reserve Bank of Australia. Accessed 31st July 2017. PDF.