On July 1, 2019, the ban on large cash purchases announced by the Australian government back in April will go into effect.
The new law makes it illegal for businesses and individuals to make cash purchases for products and services that cost more than AU$10,000 (approx. US$7000).
Payments for more than $10,000 will have to be made through check, credit card, or debit card.
Previously, only gambling-related businesses, banks, and other financial services had obligations regarding single cash transactions of $10,000 or more, and even then, they merely had to report them.
In addition to “encouraging the transition to a digital society,” the law aims to crack down on tax evasion, money laundering, black market transactions, and other criminal activity in Australia.
How will this affect cryptocurrencies?
Although there has been an increase in crypto-related crimes in Australia over the past year and a half, the interest in cryptocurrencies and crypto trading is also on the rise.
As a result, it is entirely probable that the new cash cap law will propel even more Australian businesses and individuals into the crypto space as a means to circumvent the $10,000 single cash payment limit.
Experts are saying that this new law is going to introduce new players in the crypto market for unrelated reasons but keep them there for market-healthy reasons.
Cryptocurrency trading robots like Bitcoin Rush have started actively advertising for the Australian crypto community as they are anticipating much more demand in the near future and want to be the first to acquire the new batch of customers.
Crypto exchanges across the country are also in the process of initiating their marketing campaigns to cater to cash-friendly customers in order to accommodate them as much as possible.
Traders should keep in mind, however, that every Australian crypto exchange is responsible for documenting and reporting the transaction histories of all of its customers in order for the government to enforce crypto capital gains taxes.
Crypto trading volumes in Australia are expected to grow by more than 20% due to the influx of new traders, but the online payment providers are the ones who will benefit the most.
eWallets are still more popular
Even though cryptocurrencies are quickly gaining a large following in Australia, they are still no match for online payment providers and eWallets.
The competition is going to be fierce between the two as they vie for dominance in the region.
Cryptocurrency enthusiasts are hopeful, but eWallet and online payment companies are confident that they can cover all of the newly freed up customer bases.
Will the law actually work?
Although the law will inevitably be effective at moving the country closer to its digital economy ideal, many experts are saying that it will prove to be ineffective at curbing money laundering and black market sales.
Critics maintain that there is no real way to enforce the law on actual criminals and that the local citizenry will wind up being caught in the cross-fire.
Paul Thomas, owner of Commander Security Services in Sydney, previously told News Corp, “It’s going to screw me – 95 percent of my business is cash collections.”
“On a monthly basis, we could process and move up to $4-5 million – either picking up cash, processing, and EFT-ing it to customers’ accounts, or recarrying it from customers to their bank branch,” he added.