This article on ‘CRYPTO REGULATIONS IN AUSTRALIA‘ was written by an intern at Legal Upanishad.
Crypto is also known as Cryptocurrency. It is a form of digital currency where no physical cash is needed and it uses cryptography to secure its digital transactions. Cryptocurrency uses a decentralized system instead of being regulated by the central authorities. It believes in a peer-to-peer system where there is an ease in transferring and receiving payments. When these transactions take place, they are verified and recorded in a digital ledger and the most known digital ledger is Blockchain. Like the physical currency is stored in our wallets, similarly, cryptocurrency is stored in wallets but digitalized ones. The first cryptocurrency was Bitcoin.
The author states the types of cryptocurrencies in Australia and discusses the Crypto Regulations in Australia in this article. This article explains the current Australian crypto regulatory framework.
Types of Cryptocurrencies
Crypto has two classifications which are as follows:
Coins are those cryptocurrencies that are used to serve as decentralized digital currency platforms. These include Bitcoin and Altcoin, which have their independent ledger existing as a unit value.
Cryptocurrencies other than coins which are served to make legal contracts, decentralized financial products, and enterprise solutions, using real-world applications are known as Tokens. Tokens require a proper record of transactions for their functioning purpose.
Observing the technological growth in today’s world, one can surely say that cryptocurrencies are supporting investors by providing various benefits and soon crypto will replace physical cash. Crypto shall be the only future currency.
Is Cryptocurrency legal in Australia?
The cryptocurrency was legalized in Australia in the year 2017, subject to the Anti-Money Laundering and Counter-Terrorism Financing Act, 2006. However, the regulations relating to buying cryptocurrency are quite strict. The introduction of crypto in Australia has made it a financial technology leader. The cryptocurrency is viewed as a property or an asset by the Australian Tax Office, thus, it is liable to capital gains tax.
Crypto Regulations in Australia
The Crypto Regulations in Australia are managed by the Australian Securities and Investments Commission (ASIC). Though there have been various legislative amendments, ASIC has informed that all measures and guidance are been taken for cryptocurrencies. It has recently introduced a consultation process for crypto assets. It sees to it that all the appropriate steps are taken for crypto regulations in Australia and nothing illegal is practised.
As per the December 2021 news updates, it is said that Australia Proposes New Laws to Regulate Crypto. Australia proposes to create a licensing framework for the crypto exchanges and launches a centralized bank digital system including cryptocurrencies. Also, the country seems to expand its online payment transactions providers like the famous provider’s Apple Inc and Alphabet Inc’s Google as well as buy-now-pay-later providers like Afterpay Ltd. Australian government aims to keep its country in the frontiers of the technological fields and grow more than the other countries.
The number of Australians transacting in cryptocurrency is rising immensely, the global pandemic being a major reason which has made everyone transact online.
As per the recent SBS News, Treasurer Josh Frydenberg has announced plans for tougher regulation of non-cash payment systems such as cryptocurrency and buy-now-pay-later (BNPL) services like Afterpay.
Mr Frydenberg said while Australian investors will still bear risk in cryptocurrency investments, more regulation is being introduced to promote greater transparency and accountability.
Even though the Reserve Bank has been muted about the possibility of it creating a digital currency to respond to the demand for cryptocurrency, Mr Frydenberg said the idea is under active consideration.
Further, let us know the New Australian Crypto Regulation Planned for 2022, said Senator Braggs. He stated that Australia’s planned cryptocurrency legislation could be coming soon. Also, the planned legislation will make Australia a leading nation in the digital asset world. He said that Australia needs a robust policy framework for digital assets in line with consumer protection, investor promotion, and market competition.
Current Australian Crypto Regulatory Framework
The Australian Crypto Regulations have planned for some kind of strict crypto control. Nonetheless, the country is one of the leading crypto places having legalized cryptos as early as 2017. As stated prior, the cryptos are considered property which makes them liable to capital gains tax and this helps in the growth of the economy. There have been made amendments to the laws regulating cryptos in the years 2018 and 2019.
Yet, the crypto regulations face various challenges but the major one is the definition of digital assets. Also, the crypto stakeholders keep on calling for updates regarding the crypto regulations as cryptos are said to be the main source in digital payment transactions.
As said by Senator Braggs at a Blockchain Australia-supported NFT virtual event, “The new Australian crypto regulations would also address crypto energy concerns. The Australian government is looking to attain a net-zero economy, which seeks to balance the greenhouse gas produced and those removed from the atmosphere. With the new regulations, Australian mining can soon rely fully on renewable energy sources.”
Best Crypto Exchange Australia
3 Cheap Bitcoin Exchanges:
As per the latest Economic times news report, the following are said to be the Best Crypto Exchange Australia:
eToro is a Bitcoin trading platform regulated by the Australian Securities and Investments Commission and has an Australian financial services license. eToro has an office in Sydney, New South Wales. The platform is open to Australian customers, traders in New Zealand, and many other countries across the world. eToro is also regulated by the FCA and CySEC. It enables the buying and selling of more than 120 crypto coins presently.
ByBit is an alternative Crypto trading platform in Australia. ByBit offers both spot trading and margin trading for crypto (which is called futures trading), which is not available in eToro.
Binance is the most famous Crypto trading platform which Australian users can use. Although the user base is higher in Coinbase, the volume of trade is on the higher side on Binance.
- Investing in Cryptos in Australia is said to be beneficial for the person aware of the regulations, yet he should be alert and not commit any illegal acts. A person must be careful with online transactions and pay taxes on time.
- Legal Trading in cryptocurrencies must be done instead of illegal for the want of more monetary gains. As the Australian Securities and Investments Commission’s regulations are very severe and would not tolerate any wrongdoing.
- Anything used excessively is harmful to a person. So, the use of cryptocurrencies should be monitored by oneself.
- Everything has pros and cons, similarly, it is with cryptocurrencies, so, along with taking the benefits, one should be acquainted with cons also.
The author would conclude by stating that, if a person wants to buy cryptos in Australia then he must first find a licensed exchange to do so. Cryptos are said to be a beneficial form of digital currencies and the Australian Securities and Investments Commission has made several regulations for operating cryptocurrencies, keeping in mind the frauds being done through them. The author has also stated the current Australian crypto regulatory framework and the best bitcoins available to trade in Australia. Thus, the Crypto Regulations in Australia seem to be the best, growing the country’s economy and following the laws of the country.
- Geeti Chawla, Amanda Ceruti. (2021, September 19). Australia: Understanding cryptocurrency in Australia. Retrieved: https://www.mondaq.com/australia/fin-tech/1112638/understanding-cryptocurrency-in-australia
- Mediawire. (2022, January 28). Best Crypto Exchange Australia – 3 Cheap Bitcoin Exchanges Retrieved: https://economictimes.indiatimes.com/industry/banking/finance/best-crypto-exchange-australia-3-cheap-bitcoin-exchanges/articleshow
- Staff Reporter. (2022, January 22). New Australian Crypto Regulation Planned for 2022 Says, Senator Braggs. Retrieved: https://coinculture.com/au/policy-regulation/australian-crypto-legislation-in-2022
- Biwa Kwan. (2021, December 8). Australia to toughen regulations for cryptocurrency and ‘buy-now-pay-later’ providers. Retrieved: https://www.sbs.com.au/news/australia-to-toughen-regulations-for-cryptocurrency-and-buy-now-pay-later-providers
- Renju Jose, Byron Kaye. (2021, December 8). Australia proposes new laws to regulate crypto, BNPL. Retrieved: https://www.reuters.com/markets/currencies/australia-plans-update-regulatory-framework-payment-systems-2021-12-07