The government of Australia wants to ban cash payments for goods and services exceeding 10,000 AUD ($6,900). Interestingly, it excludes digital currency, such as Bitcoin, from the restrictions, arguing that if the regulations cover crypto assets, they would also limit innovation.
Although Bitcoin is excluded from the proposed ban, such restrictions make the case for the permissionless digital asset even stronger. They exist in many countries around the world too.
The Case for Bitcoin: A Restriction on Cash Transactions is a Restriction on Freedom
Last week, Australia’s treasury stated in a memorandum that it plans to ban cash payments over 10,000 AUD. This would mean that all major purchases must be first authorised by a bank.
Australia would join several others countries that have similar restrictions on cash transactions. Cryptocurrency analysis firm CryptoRand highlighted this earlier today via Twitter.
The precise figure of some of the limits stated in the above Tweet were brought into question. For example, one person responding stated that Italy’s figure is actually 3,000 euros.
Realistically, it makes little difference the exact figure of the limit. The fact that the government, supposedly a servant of the people, has control over your spending at all as a citizen should be considered an attack on individual liberty.
Such government policies highlight why the creation of an asset class such like Bitcoin is important. Being a completely permissionless system, it requires no central authority to issue and the user can transact as much as they like across the network without restriction.
Australia Not Planning to Attempt to Police Crypto Transactions
Interestingly, the Australian government says that it has no plans to try to enforce such a ban on cryptocurrency payments. The stated reasoning behind the exclusion of cryptocurrency is that the only way to go about limiting digital payments made using Bitcoin and other digital assets would be to come down hard on the entire industry. This is something the Australian government is reluctant to do given the innovative potential of the space.
The memorandum reads:
“Digital currency is a new and developing area in the Australian economy. Unlike physical currency, it does not have a firmly established regulatory framework or industry structure. This makes it difficult to apply the cash payment limit in a way that would not largely prevent the use of digital currency in Australia or significantly stifle innovation in the sector.”
Fiat currency is much easier to control since most people keep it in a bank account and the government can simply instruct the banks to no longer allow withdrawals over a given threshold. With cryptocurrency, the government would have no way of imposing limits and would have to clampdown on the entire space. Whether this would be successful or not is another story, however.