The Reserve Bank says the majority of the $100 billion of banknotes circulating in Australia are being hoarded as a store-of-value, while a similar proportion that is being used for legitimate payments is also being deployed to facilitate crime.

In a new research paper in its latest Bulletin, published on Thursday morning, the RBA said between 9 per cent and 26 per cent of all cash, or $9 billion to $26 billion, is being used to make legitimate transactions to pay for goods and services. This is down 5 per cent since the start of the pandemic as more consumers shift to digital payments.