I really had intended to leave this topic alone, because I think I’ve done sufficient posts on it for the time being (here, here and here)! But then I read a reference to the Reserve Bank’s report The Future of Cash. This excellent article deals with a number of issues relating to the use of cash, and in a lot of ways says most of the things that can be said on this topic.
Of particular interest, in it the RBA suggests that the $100 note is used in many legitimate transactions and that scrapping it may not disrupt any criminal activity – because the $50 note “tends to be preferred by criminal elements” as it’s more familiar and less likely to be questioned (I wonder how the RBA found this out?). Thus it is suggested that to the extent that the $100 banknote is being used for nefarious purposes, any phase-out may not be particularly disruptive to those engaged in such activities.
On the broader issue of a cashless society, the RBA points out that cash has a number of attributes that are valued by end users. It has near-universal acceptance, facilitates simultaneous exchange and instantaneous settlement, is convenient for person-to-person payments and can still be used at times when electronic payment methods are unavailable due to internet or electricity outages.