Cash could disappear within decade as digital economy grows, researchers say
Notes and coins could disappear within a decade with the development of a cashless economy, according to researchers at the Australian National University (ANU).
The ANU Research School of Economics has been developing a model for government-certified digital money that researchers said could be circulating in five years.
School director Professor Rabee Tourky said there was no future for cold hard cash.
"There was a hypothetical question that arose in our research, 'can we foresee a future with paper cash?' The answer was no," he said.
Professor Tourky said Bitcoins, a type of digital currency that is created and traded electronically, were the inspiration behind a new proposal to turn all money digital.
He said the Bitcoin model had advantages over cash.
"You can make very small payments with it, like half a cent, and you can make very large, fee-free payments," he said.
But Professor Tourky said there were drawbacks that made people reluctant to adopt it.
"People don't trust it and it's not certified by government," he said.
"Because of this lack of certification there is no financial infrastructure around it. There are no Bitcoin credit cards."
His department's solution was a government-issued digital currency, as an alternative to Bitcoin, which they have called AusBit.
Professor Tourky said AusBit would address concerns surrounding security and certification by undergoing a certification process by the government and becoming an official currency.
He said this kind of model had been on the financial sector's radar for some time.
"I'm sure the Reserve Bank of Australia is thinking about these things," Professor Tourky said.
"The fact is that this will have to be addressed by the Federal Government if it wants to maintain control over the financial side of the economy."
Canada has previously piloted government-issued digital cash but halted the program last year and announced that they were putting development back into the hands of the private sector.
ANU teaching students about crypto-currency
The ANU recently began teaching first-year economics students about theories of digital cash, in an effort to keep them ahead of the game.
"I am pretty sure we are the first major university to offer this kind of curriculum," Professor Tourky said.
"Within the money and banking coursework it's a first."
June Ma, an economics student undertaking an honours thesis in digital cash at the ANU, said it was a useful inclusion.
"I think it's really exciting for the university to have such a topical issue in the economy in the classroom," she said.
"We're not just here to learn the technical skills in economics, what the school has done well is given us a big-picture approach."
Professor Tourky said the course showed students the challenges that researchers faced in the wake of the digital era.
"The hope is that students will be able to address these issues and solve them right here," he said.
"Our students go into leadership roles. They go to banks, to Treasury, to the Department of Finance and they are going to be facing this challenge in their careers."
