Bitcoin enthusiasts are rejoicing regulations that move to set Australia at the top-tier of cryptocurrency encouraging countries. The laws going into effect prevent double taxation on the transfer of Bitcoin and other cryptocurrencies. Upon announcement of the new regulations going into effect, SeekingAlpha reported that “Bitcoin surged even further on the news, up another 15% in one day.” In other words, these regulations will classify cryptocurrency as cash.
“From 1 July 2017, purchases of digital currency will no longer be subject to the GST… Currently, consumers who use digital currencies can effectively bear GST twice”
Australians Reform for FinTech and Cryptocurrency
The Australian government is working to encourage FinTech jobs in its country. A series of reforms under the “Backing Australian FinTech” outlines these laws. The entire set of regulations and laws going into effect may be viewed at the Backing Australian Fintech webpage.
“As financial services become more globalised and technological disruption becomes more prevalent, Australia needs to keep pace with innovation in banking and finance to stay competitive… FinTech is not just about digitising money… It’s about how we can create and capture the value‑add from data… The Government will make it easier for new innovative digital currency businesses to operate in Australia.
The Australian government has assumed a progressive role in the worldwide cryptocurrency market by approving these changes. Among many reasons, they state that these regulations will encourage a broader range of services in their service-driven economy of more than $1.9 Trillion AUS.
“ASX has already announced that it is seeking to introduce Blockchain technology for its clearing and settlements process.”
This suggests that the Australian Stock Exchange will be implementing a form of blockchain technology in the future. This is excited due to the larger and more practical grasps that blockchain may have on society and an economy.
Andres Antonopoulos was a leading influence of the government’s decision to encourage Bitcoin and cryptocurrency growth in Australia. He has been a stringent opponent of cryptocurrency-based taxation and regulation. He says that doing so institutes an unfair pressure on the public’s opinion of cryptocurrency, ultimately detracting from its user-base. Andres has expressed satisfaction with governments that promote cryptocurrency use with its citizens.
“If you allow the exchanges, they become allies [with the government] – they become the first people to tell you when something weird is happening and more importantly, the average middle-class person who just wants to invest their cryptocurrency has a legitimate exchange to put their liquidity in.”
Benefits of Reduced Regulations
Cryptocurrency, such as Bitcoin, Dash, Ethereum, etc. will not be taxed and be considered cash for tax purposes. This provides a benefit for those seeking tax relief; particularly by helping businesses utilizing cryptocurrency.
- Encourages growth in cryptocurrency business by reducing regulatory hurdles (the opposite of BitLicense)
- Increases public visibility and opinion of cryptocurrency, spurring on-the-fence types to take a plunge
- Magnifies cryptocurrencies regulation and stance in the future
Sets Precedent for other Governments
This governmental reform is unseen in most of the world. Australia now stands at the forefront of cryptocurrency regulations. By placing their trust in assuming a top position for cryptocurrency regulations. recently set a precedent that other countries may take advantage of. It makes political sense to encourage cryptocurrency, but not necessarily economic sense, as that is lost revenue.
SeekingAlpha stated that “If you live in a major country, that currency is getting diluted every day.” Viewed another way, cryptocurrency becomes a way to hedge one’s money against inflation caused by government control of the money supply. The possibilities are endless, and cryptocrooks will be there every step of the way.