War on Cash still bigger than War on Cryptocurrency

Living in the “crypto bubble” it is easy for us to overstate the importance of cryptocurrency in the world of financial regulation. However, in the world of finance, there has been a bigger and more far-reaching war going on. That is the war in cash.

I read an article today on how there is a ‘draft legislation from Australia’s Department of Treasury has proposed a ‘payment limit of $10,000 for payments made or accepted by businesses for goods and services’ with ‘transactions equal to, or in excess of this amount would need to be made using the electronic payment system or by cheque.’

This is yet another example of the trends of governments to sideline cash transactions. The reasons are obvious. Cash transactions are hard to monitor and trace.

Given how nascent cryptocurrency is, it is no surprise to me that Australia, for now, is largely ignoring it.

In my view, when cryptocurrency does gain a critical mass of users, there will not be a one size fits all approach to regulating it. While many believe that governments will look to restrict the use of cryptocurrency, I believe the opposite will be the case.

The majority of cryptocurrencies will offer greater transparency than existing electronic digital payments. Governments will embrace this. A public blockchain will be easier to data-mine, in real-time than electronic payments currently made behind a myriad of walled gardens.

There will however be privacy-focused cryptocurrencies, that truly act like ‘digital cash.’ Like their paper equivalent, governments will do all they can to restrict the use of these; as they seek to have greater oversight of our financial lives.

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