Australia mulling demonetization, caps on cash transactions

Moneycontrol BureauEncouraged by India’s experiment with demonetization, the Australian government is considering a proposal to scrap 100-dollar currency notes as it attempts to target tax evaders.Australian Revenue and Financial Services Minister Kelly O’Dwyer has flagged a review of the note and announced plans to introduce caps on cash transactions over a certain limit, according to a news.com.au report. Estimates peg that there are about 300 million 100-dollar bills in the market and about 92 percent of the notes in circulation is in 50- and 100-dollar notes. The Australian government is setting up a taskforce to curb black money and will appoint executives during the country’s mid-year Budget meeting. Even UBS in its recent note has batted for removal of the highest denomination currency in Australia. “Given the increasing level of digital transaction penetration we believe Australia could move to remove larger denomination notes,” UBS said. “We believe removing large denomination notes in Australia would be good for the economy and good for the banks,” it added. India's Prime Minister Narendra Modi had on November 8 announced the scrapping of Rs 500 and Rs 1,000 notes in a bid to curb black money transactions and bring to book black money holders.Earlier this week, the Venezuelan government scrapped the 100-bolivar note, giving its holders barely 72 hours to swap the old currency note for new. The stated intent was to combat counterfeit notes and hoarding by mafias.