Australia’s Paper Money: History, Evolution, and the Future of Cash

From the gold rush era to today’s tap-and-go convenience, Australia’s relationship with paper money has always mirrored our economic story. In 2025, cash is no longer king, but the humble banknote still has a tale to tell—about trust, innovation, and the shifting sands of personal finance.

From Colonial Notes to Polymer Bills: A Brief History

Australia’s journey with paper money began in the early 1800s, with privately issued promissory notes circulating alongside British coinage. As the colonies grew, so did the need for a unified currency. The first official Australian notes arrived in 1910, and by the 1960s, we’d moved to decimal currency.

• 1988: Australia became the first country to introduce polymer banknotes, starting with the $10 note—ushering in a new era of security and durability.

• Iconic designs: Our notes have featured everyone from Dame Nellie Melba to David Unaipon, reflecting a diverse national identity.

• Security features: Holograms, transparent windows, and tactile features for accessibility have kept our cash ahead of counterfeiters.

The Digital Surge: Cash Use in 2025

Fast-forward to today: Australians are paying with their phones, watches, and even QR codes. According to the Reserve Bank of Australia’s 2024 Payments System Report, cash now accounts for less than 10% of all transactions, down from 69% in 2007. The pandemic accelerated this trend, with many businesses going cashless for hygiene and efficiency.

Yet, paper money isn’t extinct:

• Backup in emergencies: Cash remains vital during power outages or system failures, as seen during 2024’s East Coast floods.

• Financial inclusion: Around 1.3 million Australians still rely on cash for budgeting or because they lack digital access.

• Privacy: Some prefer cash for purchases that don’t leave a digital footprint.

Policy Updates and the Road Ahead

The RBA and Treasury are watching cash’s decline closely. In 2025, two policy shifts stand out:

• Access to Cash Guarantee: The federal government reaffirmed that major banks must ensure reasonable ATM and branch access, especially in regional areas, after several closures in 2023-24 sparked community backlash.

• Digital ID and eAUD trials: Australia’s central bank digital currency (CBDC), the eAUD, is in limited pilot testing. If adopted, it could reshape how we use—and perceive—physical cash.

Meanwhile, the RBA is continuing to upgrade banknote security, even as the focus shifts to digital payment resilience. The message is clear: while the volume of paper money may shrink, its role as a financial safety net remains part of the national conversation.

Real-World Impact: Who Still Uses Paper Money?

For some, cash is a lifeline. Pensioners in rural NSW, market stallholders in suburban Melbourne, and tourists wary of fees all cite practical reasons for sticking with notes and coins. In 2025, initiatives like the “Keep Cash Alive” campaign highlight ongoing demand for choice in payments.

But the direction is set: with digital wallets, biometric security, and instant payments, cash’s share will likely keep falling. The real question isn’t whether paper money will disappear overnight—it’s how Australia will balance innovation with inclusion and resilience.