Australia is considering removing the AU$100 bill from circulation. The AU$100 bill is the largest circulating bill in Australia and there is 3 times as many AU$100 bills in circulation then AU$5 bills. Australia’s $50 and $100 bills make up 93% of all currency in the country.
Australia, like many developed countries, has seen an increasing reliance on digital transactions; credit card transactions for example increased 7.3% per annum since 2009. The task force in charge of analyzing the decision says that removing the AU$100 bill would reduce crime, increase tax revenue with few cash transactions and reduce welfare fraud.
Australia has a problem with mass welfare fraud by the elderly who use the $100 bills as a store of value. Instead of depositing their money at the bank, they withdraw the funds and store them in their cupboards so that they can qualify for discounted council rates, insurance, and phone rentals. The task force claims that the removal of the AU would reduce tax and welfare fraud$100 bill.
Last month, India suddenly withdrew their 500 and 1000 rupee banknotes to shut down a massive market of untaxed transactions.
As an investor, this just once again proves the growing need to watch out for investment opportunities in financial companies that facilitate cashless transactions.