An official announcement from the leading financial provider in Australia, ANZ, revealed that the bank would suspend cash-related withdrawals and deposits in some branches. Ranking among the Big Four banks in Australia, the ANZ team plans to go back to ATMs and electronic depository machines system in the affected branches.
The ANZ decision has become a point of discussion among Australian investors and consumers. A statement from the Council on the Ageing (COTA) chief executive, Patricia Sparrow, argued that the ANZ decision would disadvantage older adults.
Sparrow regretted that many older people in Australia are crypto-illiterate and demonstrates less interested in operating digital devices.
Why Did ANZ Suspend Cash Withdrawals ?
On the contrary, other market critics argued that ANZ’s move exposes fiat users to the risk of technical failure. The ongoing speculation on the ANZ decision has created concern about the Australian central bank digital currencies (CBDCs) replacing the cash economy.
Some investors argued that adopting the cashless economy aimed at easing the adoption of CBDC. A note to the Australian investor from the ANZ spokesperson argued that the suspension affected most developed regions in Australia.
The spokesperson claimed the user would use alternative payment methods in those branches with suspended withdrawals. He noted that there are more ATM and deposit systems within the Australian metropolitan.
In 2019 Australian banks witnessed a 50% decrease in-branch transactions. The ANC report coincides with the Australian strategic move to enter a cashless economy. In 2007 fiat transactions plummeted by 59%. The numbers depreciated further in 2019 by 27%.
The decline in cash transactions challenged the Reserve Bank of Australia (RBA) team to conduct a study in the previous trading year. The RBA team is yet to publish last year’s study report.
However, the RBA team argued that the downtrend of fiat transactions could be triggered by the after-effect of the Covid-19 pandemic. They discussed that the investors’ massive shift to the digital sector impacts the decline in the use of fiat currencies.
Subsequently, the RBA team witnessed a decline in ATMs and market saturation that limited establishment of new bank branches in Australia. Per the RBA report, bank branches have been dropping by 30% since 2017.Furthermore, since 2016 the number of ATMs has decreased by 25 %.
Will CBDC Replace Fiat Currency?
Recently the RBA team announced plans to launch CBDC experimentation before mid-year. The RBA team is skeptical that adopting CBDC could replace the Australian fiat currency.
They argue that the CBDC adoption might undermine an individual’s privacy and security due to the anonymity features. This implies that the fiat currency will continue to dominate the Australian market until the CBDC vision come to fruition.