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Crypto industry disappointed as Australia looks to enshrine tax rules

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SYDNEY: The crypto industry said Wednesday it was disappointed with Australia’s decision to continue to treat digital currencies as tax assets rather than as foreign currency.

In its budget announcement on Tuesday, the government said it would introduce legislation specifying that digital currencies such as bitcoin should be treated as assets.

This means that investors pay capital gains tax on their profits when they sell crypto assets through exchanges or trade digital assets.

In its budget announcement, the Australian government said it would clear up uncertainty after El Salvador decided to adopt bitcoin as legal tender last September.

However, Australia said government-issued digital currencies, or Central Bank Digital Currencies (CBDCs), are treated as foreign currencies.

About 90% of the world’s central banks are currently using, testing or considering CBDCs. Most people don’t want to be left behind with Bitcoin or other cryptocurrencies, but they do grapple with technical complexity.

Mitchell Travers, former cryptocurrency exchange and founder of blockchain consultancy Soulbis, said the budget change was unclear and seemed to contradict the government’s testing of the viability of CBDCs. said it looks like

“Especially given the fact that the Treasury Department is investing in trying to transition the traditional technology system that underpins the financial system, there is no real compulsory effort by the government to tax crypto assets in the early stages. It’s not wise to approach it towards digital assets,” Travers said.

“It would be an ironic dichotomy if they forced a tax on digital assets and set up their own CBDC without a clear definition of which tokens represent which tax treatment.”

The crypto sector is largely unregulated in Australia, and the Treasury Department said in August that it would prioritize “token mapping” work, which will help identify how crypto assets and related services should be regulated.

El Salvador, which adopted bitcoin as its legal tender last year, has faced heavy economic losses due to a sharp drop in cryptocurrency prices.

Caroline Bowler, CEO of Australia-based cryptocurrency exchange BTC Markets, said, “What happened in El Salvador and the price of Bitcoin, they took a snapshot in time and evaluated it for a long time. I think we are doing,” he said. It’s been left behind by other counties taking a more open-minded approach.

“Europe will be ahead,” Bowler said. “The UK now has a central bank digital currency-savvy prime minister.” “Unless we consider proportional and responsible regulation, all these trading partners will be ahead of Australia.”

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