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Legal Tender in Australia: 2025 Guide to Cash, Payments & Policy

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The term ‘legal tender’ is often tossed around in conversations about cash, digital payments, and even cryptocurrency. But in 2025, as Australia’s payments ecosystem continues to evolve, understanding what legal tender really means—and what it doesn’t—has become more important than ever. Whether you’re a small business owner, a consumer, or just someone who likes to pay in cash, here’s what you need to know about legal tender in Australia right now.

At its core, legal tender refers to money that must be accepted if offered in payment of a debt. In Australia, this is primarily banknotes and coins issued by the Reserve Bank of Australia (RBA) and the Royal Australian Mint. But here’s the twist: while cash is legal tender, businesses aren’t always required to accept it for every transaction.

  • Australian banknotes (all denominations issued by the RBA)

  • Australian coins (subject to limits: for example, no more than 10 times the face value of coins less than $1 in a single payment)

Cheques, EFTPOS, credit cards, and digital wallets are not legal tender. They’re payment methods accepted by agreement, not by law.

The last few years have seen a sharp decline in the use of cash, accelerated by the pandemic and the rise of contactless payments. The government and the RBA have responded with a series of policy updates and reviews in 2024 and 2025:

  • Review of the Payment Systems (Regulation) Act 1998: In late 2024, the government concluded a major review aimed at modernising payment regulation for a digital-first economy.

  • Proposed Digital Payments Law: Legislation before Parliament in early 2025 seeks to clarify the status of digital wallets and stablecoins, but does not make them legal tender.

  • Cash Acceptance: While legal tender rules remain unchanged, the government has resisted calls to mandate cash acceptance in all retail settings, focusing instead on consumer education and access.

There’s been debate about whether Australia should follow countries like Sweden in going almost cashless. However, policymakers have so far maintained that cash must remain accessible, especially for vulnerable Australians and regional communities.

Here’s where legal tender actually matters—and where it doesn’t:

  • Paying Debts: If you owe someone money (like a loan or a bill), and you offer to pay in cash, your creditor can’t refuse legal tender for repayment of the debt.

  • Retail Transactions: Shops and businesses can set their own payment policies. They can refuse cash (or only accept certain denominations) as long as they clearly inform customers before the transaction.

  • Fines, Taxes, and Government Payments: Government agencies typically accept legal tender, but some are moving towards digital-only payments for efficiency.

Example: In 2025, if you walk into a café and see a “Card Only” sign, the business is within its rights to refuse cash. But if you’re settling a court-ordered fine, the agency must accept legal tender—unless legislation specifically says otherwise.

With the RBA actively researching a central bank digital currency (CBDC), the definition of legal tender could evolve again in the next few years. For now, though, cash remains king when it comes to legal tender status—even if it’s no longer the most popular way to pay.

Key takeaways for Aussies in 2025:

  • Cash is still legal tender, but businesses can set their own payment rules for day-to-day transactions.

  • Legal tender rules matter most for settling debts, not for routine shopping.

  • Stay alert to ongoing changes in payment policy as Australia’s digital payments revolution continues.

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