It is safe to buy Bitcoin in Australia. Millions of Australians have successfully bought their Bitcoin and kept it safe. Nevertheless, you should always take precautions to keep your parts safe. More fundamentally, the current legal status of cryptocurrencies varies greatly from country to country. While the use of cryptocurrencies is unhindered within the European Union, some countries like Turkey have banned payments in cryptocurrencies. For tax purposes, Bitcoin is treated as a property like a house or car and is subject to capital gains tax. However, as the ATO noted, capital gains tax does not apply if you use Bitcoin for everyday transactions and not as an investment. Cryptocurrencies, digital currencies, and cryptocurrency exchanges are legal in Australia, and the country has been progressive in implementing regulations on cryptocurrencies. In 2017, the Australian government stated that cryptocurrencies are legal and therefore subject to the Anti-Money Laundering and Terrorist Financing Act 2006 (AML/CTF 2006), Section 5 and related rules. Lawmakers have specifically stated that Bitcoin (and the cryptocurrencies that shared its properties) should be treated as property and subject to capital gains tax (CGT). Cryptocurrencies were previously subject to controversial double taxation under the Australian Goods and Services Tax (GST): the change in tax treatment is indicative of the Australian government`s gradual approach to cryptocurrency. Cryptocurrency is often considered bad for the environment because it requires a lot of energy to mine new coins.

Essentially, mining is about creating new bitcoins by solving increasingly difficult mathematical puzzles in a so-called proof-of-work (PoW) process. Miners use specialized computers that require huge amounts of electricity: Bitcoin mining in the United States generates about 40 billion pounds of carbon emissions. Our Freeman Law Cryptocurrency Law Resource page provides a summary of the legal status of cryptocurrency for each country in the world with legal or regulatory requirements for cryptocurrency. The following globe contains links to country summaries: Disclaimer: This is provided for general information purposes only. The information presented does not constitute legal advice. ComplyAdvantage assumes no responsibility for the information contained in this document and disclaims all responsibility with respect to the content or for any action taken on the basis of such information. The first set of cryptocurrency laws in Australia is about its exchanges. These are legal, but all cryptocurrency exchanges are required to register with the Australian Transaction Reports and Analysis Centre (AUSTRAC) under Part 6A of the AML/CTF 2006 Rules. Cryptocurrencies can be considered assets for capital gains tax purposes, with the guide stating: “If you use Bitcoin to purchase goods or services for personal use or consumption, any capital gain or loss from the sale of Bitcoin (as a personal use value) will not be taken into account, provided the cost of Bitcoin is $10,000 or less.

[10] The proactive regulation of Bitcoin in Australia has helped make Bitcoin incredibly popular in the country. With 1 in 5 Australians owning cryptocurrencies, there are certainly a lot of hodlers among us. On the other hand, the Reserve Bank of Australia (RBA) is currently investigating use cases of a central bank digital currency. At present, cryptocurrency in Australia is not considered a fiat currency (declared as legal tender), but as property. How it works: “Bitcoin miners” use computer-intensive software to validate transactions that go through the Bitcoin network. They earn new Bitcoins in the process. [6] ATO, Income Tax: Is Bitcoin a “foreign currency” within the meaning of Section 775 of the Income Tax Assessment Act, 1997 (ITAA 1997)? (TD 2014/25), www.ato.gov.au/law/view/document?src=hs&pit= 99991231235958&arc=false&start=1&pageSize=10&total=7&num=3&docid=TXD/TD201425/NAT/ATO/00001&dc=false&tm=and-basic-TD 2014/25 (last visited on 1. March 2018), archived perma.cc/DS47-Y2JW; ATO, Income Tax: Is Bitcoin a “CGT asset” within the meaning of section 108-5(1) of the Income Tax Assessment Act, 1997? (TD 2014/26), www.ato.gov.au/law/view/document?src=hs&pit=99991231235958&arc=false&start=1&pageSize=10&total=7&num=2&docid=TXD/TD201426/NAT/ATO/00001&dc=false&tm=phrase-basic-TD 2014/26 (last visited March 1, 2018), archived on perma.cc/B9QN-N4FM; ATO, Income Tax: Does Bitcoin trade shares within the meaning of section 70-10(1) of the Income Tax Assessment Act, 1997 (ITAA 1997)? (TD 2014/27), www.ato.gov.au/General/Gen/Tax-treatment-of-crypto-currencies-in-Australia – especially Bitcoin / (last visit on 1. March 2018), archived at perma.cc/BS2E-UZKW; ATO, Fringe Benefits Tax: Does the supply of Bitcoin by an employer to an employee in the course of his or her employment constitute a marginal benefit to real estate within the meaning of section 136(1) of the Benefits Tax Assessment Act, 1986? (TD 2014/28), www.ato.gov.au/law/view/document?src=mm&pit=99991231235958&arc=false&start=1&pageSize=10&total=7&num=0&docid=TXD/TD201428/NAT/ATO/00001&dc=true&tm=and-basic-TD 2014/25 (last visited in March.