Why Is Australia’s ANZ Halting Fiat Deposits & Withdrawals?

Paigambar Mohan Raj
Source: Studycafe

One of the “Big Four” banks in Australia, ANZ, will stop allowing deposits and withdrawals from a number of its Australian branches. The move is an attempt to push users towards ATMs and deposit machines. The decision has drawn criticism from people like Patricia Sparrow, CEO of the Council on Aging. According to Sparrow, the shift may have a disproportionately negative impact on older individuals because they are less technologically savvy. Others have asserted that it would increase the vulnerability of fiat users to technical problems.

The action has also stoked new concerns about efforts to replace cash with CBDCs (central bank digital currency). Australia is currently running a CBDC pilot program, with an update due in the middle of 2023. One of the effects noted by the RBA was that a CBDC might replace the Australian dollar. The potential impact on personal freedom and privacy of CBDCs replacing currency is a significant additional concern. According to an ANZ spokeswoman, the affected branches are in metropolitan areas that are close to ATMs and deposit machines.

Why is the Australian bank ANZ shutting withdrawals and deposits?

The shift occurs as Australia increasingly moves toward becoming a cashless society. According to a March 16 bulletin from the Reserve Bank of Australia (RBA), the proportion of retail payments made in cash decreased from 59% in 2007 to just 27% in 2019.

The decision was further accelerated by the decrease of more than 50% in-branch transactions over the previous four years. Australia’s RBA also noted that a significant number of merchants have voiced a need to discourage cash payments in the future.

The RBA further stated that the Covid-19 pandemic accelerated the trend towards a cashless society. The RBA also noted a nationwide decline in the number of bank branches and ATMs. Since 2017, the number of bank branches has decreased by 30%, and the number of ATMs by 25% since 2016.