Cash as we know it could be relegated to the confines of history within the next 10 years, one of Australia’s leading economic experts has warned.
Instead of carrying coins and paper notes around, Australians will pay for things with electronic currencies like Bitcoin or Australian government-issued digital cash.
Australian National University school of economics director professor Rabee Tourky said the phasing out of physical cash was a “major economic issue”.
“In 10 years’ time there won’t be any paper cash. The big question is what’s going to replace it in Australia?” Professor Tourky said.
According to the Wall Street Journal, the unregulated cryptocurrency market is worth $4 billion, but has faced some teething issues.
Bitcoin, the leading cryptocurrency, which launched in 2009, has seen an 80 per cent drop in its value since reaching US$1,147 in December 2013.
Writing for the Wall Street Journal, Duke University finance professor Campbell Harvey said while the currency was too volatile to store long-term growth, it was still early in the industry.
Professor Tourky said he did not believe currencies like Bitcoin, however, would be widely used by Australians in the future.
“Will it be Bitcoin? I don’t think so. More likely it will be ‘AusBit’, an Australian government issued digital cash,” he said.
“It’s quite clear that the central bank in Australia is going to have to issue electronic cash.
“It’s also going to have some issues that cash as we know it doesn’t have, such as privacy, anonymity and the perhaps the emergence of anonymous markets.”
Professor Tourky said digital currency would be a major issue for both governments and the banking sector in the next five years, and economics students were already being taught about cryptocurrencies.