Australia Moves To Ban Cash Payments Of $10,000, Digital Currency Is An Exception To The Rule
- Government asking for public feedback to implement the economy-wide cash payment limit from 1 January 2020
- Digital Currency is one of the six exceptions because it is new, doesn’t have a regulatory framework, and the government doesn't want to “stifle” innovation
- Per the draft, digital currency is not being used to facilitate black economy activities
- The Australian government is asking for public feedback on the ban of cash payments equal to and surpassing $10,000.
In the 2018-19 Budget, the government had announced that it could introduce an economy-wide cash payment of $10,000 made or accepted by businesses. Transaction equal to or in excess of this limit would be made by cheque or electronic payment system.
This move was recommended by the Black economy to tackle tax evasion and other criminal activities.
On July 26, 2019, the government has released for public consultation exposure draft legislation to implement from 1 January 2020.
The public consultations are open until 12 August 2019.
Australia Encouraging Innovation In Digital Currency
The bill introduces offences for entities that either make or accept cash payments equal to or exceeding $10,000. From 1 January 2020, it will be a criminal offence for which the maximum penalty is up to two years imprisonment and/or 120 penalty units ($25,200).
However, there are few exceptions to this including payments of digital currency. For digital currency’s exception, two requirements are specified,
(a) the payment includes, in whole or in part, payment of digital currency;
(b) if that payment of digital currency were disregarded, no remaining payment would contravene the Act.
One of the six exceptions, Digital currency it says is a “new and developing area” in the Australian economy. Unlike cash, it also doesn’t have a firmly established regulatory framework for industry structure.
“This makes it difficult to apply the cash payment limit in a way that would not largely prevent the use of digital currency in Australia or significantly stifle innovation in the sector.”
Another reason for the same is “little evidence” that digital currency is being used to black economy activities in Australia.
As such, the government has decided to effectively carve digital currency out from the cash payment limit.
However, this position will remain under ongoing scrutiny to ensure that the exemption of digital currency payments remains appropriate.