Australia Bill: Crypto Won’t Be Taxed As Foreign Currency

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The Australian government has officially announced that they won’t be giving crypto the cold shoulder regarding taxes. 

That’s right, folks, your beloved Bitcoin and other digital currencies will not be treated as foreign currency when it comes time to pay Uncle Sam (or, should we say, Auntie Merlinda).

After El Salvador adopted Bitcoin as legal tender last year, the government has proposed new legislation in Australia to clarify the treatment of digital currencies, according to Treasury’s 2022-2023 budget document released Tuesday.

The budget document said the new legislation wouldn’t change Australia’s current tax treatment of most digital currencies. That includes “the capital gains tax treatment where they are held as an investment.”

This is a massive win for crypto enthusiasts in Australia, as it means that their digital currency investments won’t be hit with extra taxes just because they’re not traditional foreign currencies. Now, we can all HODL on to our beloved Bitcoin without worrying about Uncle Sam coming after us for more cash.

The managing director at eToro Australia, Robert Francis, stated that the federal budget’s recognition of crypto is something new altogether and that parliament will soon be seeing enough new tax laws regarding cryptocurrency.

He said that by outlining their policy, the Australian government had given investors insight into how they view digital assets concerning other more conventional markets such as foreign currency.

“This is a step in the right direction for cryptocurrency and blockchain technology integration into traditional financial systems,” stated Mr Francis.

Blockchain is the keeper of a digital ledger of transactions and is what allows cryptocurrencies to exist.

Since 2018, the Australian Taxation Office estimates that more than one million taxpayers have traded in crypto assets.

“It is as crucial as ever for investors to keep comprehensive records of their transactions and resulting profits and losses,” said Mr Francis.

According to University of NSW School of Information Systems and Technology senior lecturer Eric Lim, the latest federal budget signals that the government has accepted cryptocurrencies as here to stay.

“Many people believe that it’s the wild west out there, and part of that is because these entities seem to be lone wolves who resist being regulated,” he said.

“The cryptocurrency industry was welcoming of good and fair regulation,” Dr Lim said.

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