The Budget’s cash ban may give online currency Bitcoin a boost as people try and avoid banks.
Treasurer Scott Morrison announced a cash crackdown earlier this week where cash transactions of more than $10,000 will be illegal from July 1, 2019.
The ban is to stop the circulation of dirty money which may have come from the underworld of drug dealers, crime and people avoiding tax.
The Budget’s cash ban, where people can’t use more than $10,000 in cash for transactions. may give online currency Bitcoin a boost as people try and avoid banks (stock image)
The ban is to stop the circulation of dirty money which may have come from the underworld of drug dealers, crime and people avoiding tax however may lead to boost in Bitcoins (pictured)
Black Economy Task Force head Michael Andrew, the group behind the cash ban, explained people using cash for large payments are usually those ‘avoiding child maintenance’ or ‘personal trainers, hairdressing and nail salons’.
While the Australian Government is trying to axe big cash transactions to end terrorism finances, there are thoughts it could lead to an increase use of Bitcoins and other digital currencies including Monero or Dash.
People who caught onto to the cryptocurrencies when the tech product were first developed were individuals trying to avoid the government, News.com.au reported.
The digital currency is used worldwide and has no central bank or administrator, making it easy for people to use the funds without questions being raised.
While some believe online currencies like Bitcoin will increase with the cash ban, co-founder of Travel by Bit, Caleb Yeoh, claimed the online transactions could still be monitored by governments.
‘People often have this impression that if you take payments in Bitcoin you’re creating a cash economy, under the table … that’s not true at all,’ he told the publication.
The expert said the biggest risk with using Bitcoin is paying small businesses, like a tradie, with the currency when traditionally they might have been paid in wads of cash.
While the Australian Government is trying to axe big cash transactions to end crime like terrorism, there are thoughts it may lead to an increase use of digital currencies (stock image)
WHAT IS CRYPTOCURRENCY?
Bitcoin is a digital currency, known as cryptocurrency, which began in 2009 and were initially worth just a few cents.
In 2013 they hit the USD$100 mark for the first time, before rising to USD$900 at the start of 2017. Today they are worth USD$12,000 (AUD$17,000).
Thousands of amateur traders are now betting huge amounts, while start-up companies use bitcoin to raise money and avoid the transparency needed in a stock market float.
But experts fear the currency has become a vast speculative bubble detached from reality.
Watchdogs across the world have warned there could be a sudden massive crash if the market turns, losing investors billions of dollars.
Economist Nouriel Roubini, who predicted the global financial crisis (GFC), is one who has called cryptocurrency a ‘giant speculative bubble’ bound to end in disaster.
However cryptocurrency investors such as Mr Colosi and Mr Lenoci claim the price will continue to boom, potentially as high as USD$50,000 or AUD$100,000.
Bitcoins are generated by using an open-source computer program to solve complex math problems. This process is known as ‘mining’.
Each Bitcoin has a unique fingerprint and is defined by a public address and a private key. Owners of bitcoin do not own a physical coin, but instead a string of numbers and letters that give a specific identity.
Other types of coins are available online including Ethereum, LiteCoin, Neo and Monero — these non-bitcoin cryptocurrencies are often called altcoins.