Cryptocurrencies have become popular as digital assets. You can use them in purchasing goods and services and serve as an investment asset. Due to crypto’s price volatility, more and more people have become interested in using them for their financial transactions. However, despite their creation more than ten years ago, not all nations treat cryptocurrencies as legal and acceptable. While some states ban using these digital assets entirely, some allow them, but specific rules and regulations should be complied with.
Generally, one of these popular countries is Australia. In almost all parts of this nation, the government declared cryptocurrencies legal in 2017. But as a consequence of widespread acceptance, Australian authorities decided to implement specific policies to regulate its use.
If you’re planning to invest in cryptocurrencies in Australia anytime soon, keep reading this article to understand these regulations better.
Regulations On The Use Of Crypto
As mentioned, cryptocurrencies are legal in different parts of Australia. To show the country’s support for these digital assets, the Reserve Bank of Australia, known to be Australia’s central bank, is said to consider the issuance of a Central Bank Digital Currency. They’ll use it to signify the Australian government’s desire to welcome blockchain technology in the financial market.
As a result, Australians can legally buy and sell crypto assets nowadays. However, several rules and regulations should be complied with to avoid legal repercussions. These can include the following:
- The Australian Securities and Investments Commission (ASIC) is responsible for overseeing the use of cryptocurrencies by the Australians. Whether it’s a crypto exchange transaction, payment, mining, and other related activities, ASIC will strictly monitor and control every transaction to avoid illicit activities like money laundering.
- Cryptocurrency businesses need to be transparent in all their transactions, especially filing their taxes and other government-mandated reports to protect themselves against terrorism financing and other criminal activities.
- Cryptocurrency mining is also legal in Australia, provided the miners utilize their resources, such as electricity and mining equipment.
Indeed, regulations are in place to ensure the proper use of cryptocurrencies, like Bitcoin, Ethereum, and Ripple. However, suppose you plan on investing and want to better understand the legalities of Bitcoin and other assets. In that case, you should read more tips here or browse online to collect more valuable information.
Crypto Tax Regulations
After legalizing cryptocurrency in 2017, the Australian government imposed a tax obligation on these digital assets. The Australian Taxation Office (ATO), which is in charge of overseeing taxation regarding crypto, has provided specific policies regarding the tax treatment of cryptocurrency in the country. These can include the following terms:
- Australians must pay taxes when selling cryptocurrency for the Australian dollar (AUD), gifting someone with crypto, buying goods or services amounting to not less than AUD$10,000, and particular trading crypto for another.
- The ATO doesn’t treat cryptocurrencies, like Bitcoin, like money. But instead, they’re considered as property that’s subject to capital gains taxes. The actual market value of the crypto asset in AUD at the time of conveyance is used to determine the loss or capital gain.
- Taxes related to cryptocurrency mining can be classified as businesses or hobbies. If it’s a business, the coins will be subject to taxation right after they’re mined. However, if it’s only a hobby, the currencies will only be taxed after being sold to someone else.
Crypto Exchange Regulations
Like the use of cryptocurrencies, the Australian government also regulates the operation of crypto exchanges or trading platforms. For instance, in 2018, the Australian Transaction Reports and Analysis Centre (AUSTRAC) established some regulations for crypto exchange operators. These can include the following rules:
- All crypto exchanges that will operate in Australia should be registered with AUSTRAC. They’re also required to meet specific requirements, such as identifying and verifying their users and maintaining transaction records.
- All crypto exchange operators should also comply with Anti Money Laundering and combat the Financing of Terrorism by reporting their obligations. When an exchange fails to register with AUSTRAC, it may be subjected to certain criminal charges and penalties.
Given the guidelines mentioned above, there’s no doubt that cryptocurrency exchanges are strictly regulated in Australia to safeguard it against criminal activities effectively. So, if you’re planning to use an exchange to facilitate your crypto transactions, it would be best to check and get familiar with your prospects first. That way, you’ll be able to find a legitimate trading platform and prevent any legal trouble down the road.
Final Thoughts
Like many countries worldwide, Australia has continued to provide proactive rules and regulations about cryptocurrency and blockchain technology for crypto users, businesses, and transactions. Hence, there’s no question why Australians are free to buy, sell, or mine cryptocurrencies. However, it’s best to keep in mind the information mentioned above to ensure your compliance with the country’s cryptocurrency laws and regulations.
