Cash is King. Or is it?

For more than 5000 years, cash has reigned as King. Yet, in today’s modern, technology-enabled world many are questioning whether it continues to play a central role in society or if it is just a relic of its ancient past. With the rise of digital payments and currencies, are we witnessing the death of cash?

It is predicted we could see cash disappear as early as 2030, a mere five years away, according to research from RMIT University.

The numbers speak for themselves. The latest data from the Australian Banking Association (ABA) shows the value of cash transactions are now just 7.5 percent, while about 40 per cent of Australians are comfortable leaving home without their wallet or cards. Even kids have apps to receive their pocket money.

The reality is cash costs. From printing, storage and transport costs to labour and security challenges.

Access is also becoming an increasing issue, with 200 bank branches closing in the last financial year and more than 6000 ATMs removed over the last five years.

CBA even floated the idea of charging customers to withdraw cash. We are moving faster than ever to a cashless society.

While card payments have stepped in as the use of cash declined, they are starting to lag behind. We are seeing the rise and rise of digital wallets, which accounted for $126 billion in payments in the last year alone – an 18-fold increase since 2019.

It is clear the payments landscape is changing at pace, fuelled by digital innovation and consumer demand for seamless, convenient payment methods. It’s only a matter of time until we ask…

What’s next?

The answer to this question may be cryptocurrencies. One in four Australians have purchased crypto at some point, with that number steadily on the rise. Even institutions are embracing it. Crypto is now offered by most major banks, reaching record highs in 2024, and global pension funds are now taking it seriously.

Crypto has clearly hit the mainstream.

A major pushback to crypto becoming part of the traditional payment landscape has been Bitcoin price volatility and risk. Enter stablecoins.

Stablecoins are a type of digital currency pegged to real-world assets or fiat currency, like the US dollar.

This stability makes them attractive for everyday transactions, as they combine the benefits of cryptocurrencies with the predictability of traditional currencies.

Developed more than a decade ago, speed, transparency, and affordability are just a few of their benefits. It’s no wonder the volume of transactions using stablecoins has increased by 50 per cent year-on-year, with 30 per cent of global money transfers now facilitated through stablecoins.

The potential benefits of cryptocurrencies and stablecoins are significant and widespread. From lower transaction costs, enhanced efficiency of cross-border payments, and greater transparency over transaction pathways and participants, crypto is rapidly gaining a foothold as a respected payment option.

We don’t need a crystal ball to see its potential, with many leading retailers already accepting crypto payments, including The Coffee Club and ShopBack to name just two.

Global tailwinds are also paving the way for crypto’s emergence into the mainstream. With Trump stepping into office last month, his pro-crypto stance is accelerating crypto adoption in the US and beyond.

Australia has an opportunity

It has never been more important for Australia to introduce a formal regulatory framework for the crypto industry that both protects consumers and fosters innovation.

If we do not, there is a risk that Australia will cede ground to other nations. As we have seen in Japan, UAE, and Europe, a licensed environment boosts consumer and investor confidence, while providing clear guardrails for the industry.

While there has been progress, the upcoming Federal election presents an opportunity to fast track Australia’s position as a global crypto leader.

‘The future of payments may be crypto’

While cash may no longer reign, perhaps the same can be said for the payments industry more broadly.

From wildly variable and unregulated card fees becoming a thorn in consumer sides to Big Tech muscling in on the Big 4, the sector is clearly facing a shake-up.

With consumer demand for seamless, transparent, and affordable payments experiences at an all-time high, the future of payments may be crypto.

It’s time for government, industry, and business to work together to turn this futuristic vision into today’s reality.

James Quinn-Kumar is the director of community engagement at Binance Australia & New Zealand.

The views, information, or opinions expressed in the interviews in this article are solely those of the contributing author and do not represent the views of Stockhead.

This article was developed in collaboration with Binance, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.