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Reserve Bank of Australia Cannot Account for $32 Billion in Banknotes
Abc reported that Reserve Bank of Australia estimates place only about 70 percent of circulating banknotes in tracked categories, leaving $32 billion unaccounted for. The figures draw on data for legitimate transactions, losses, domestic and international hoarding, and shadow economy use.
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The Reserve Bank of Australia estimates that $32 billion worth of banknotes in circulation cannot be traced to any measured category of use, Abc reported. Even when applying the highest figure in each tracked segment, the categories cover roughly 70 percent of notes. Cash accounts for less than one in five transactions.
The central bank has continued printing billions of dollars in new notes each year. Its analysis assigns 9 to 14 percent of notes to legitimate transactions and 5 to 9 percent to notes that are lost, forgotten or destroyed. Domestic hoarding estimates range from 2 percent, derived from insurance claims after residential fires, to 7 to 15 percent from consumer surveys.
International hoarding is placed between zero and 20 percent. The shadow economy, including unreported activity, is estimated at 7 to 11 percent. The Reserve Bank assumes the remaining notes are hoarded either inside or outside Australia.
A 2017 government taskforce report cited by the bank indicated the illicit economy may have doubled in size since 2012. Wastewater data led the bank to estimate the 2022/23 drug economy at $14 billion before adjusting the cash component to $1.6 billion to reflect an average note velocity of roughly 10 uses.
The Australian Criminal Intelligence Commission reported seizing $1.4 billion in drugs and $24 million in cash and assets in 2021/22.
AUSTRAC stated in a 2024 report that cash remains a mainstay of money laundering and one of the most commonly restrained asset types in confiscation cases. High-denomination notes such as the 500 euro note and the $10,000 Singaporean note are no longer printed, though both remain legal tender.
