Treasury has quietly released the draft regulation for its proposed cash mandate on essential goods, which hard cash advocates have labelled as a "series of loopholes" for businesses.

Under the nine-page draft published late on Friday, grocery and fuel retailers must accept up to $500 in cash payments.

Small businesses — which the Australian Bureau of Statistics estimates make up 97.2 per cent of all businesses — that earn less than $10 million a year will be exempt from the mandate, including small grocery and fuel retailers.

Treasury noted that small businesses "find it harder to deal with cash".

The bigger grocery and fuel retailers that are captured under the mandate can still, however, be granted an exemption if they can prove an exceptional circumstance. 

"The mandate will

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