A lot of people are unsure as to the legality and legitimacy of cryptocurrencies in Australia.
A cryptocurrency is an emerging form of currency, which is becoming increasingly popular in Australia.
Cryptocurrencies are not issued by a central bank like traditional fiat currencies (such as dollars, pounds, or euros), but are instead created by a computer algorithm.
Cryptocurrencies can be used for online transactions such as making purchases on websites and crowdfunding platforms without using traditional forms of payment such as credit cards.
This post will explore whether cryptocurrency is legal in Australia, how it’s regulated, and what penalties apply if you don’t comply with regulations around cryptocurrencies in Australia.
Is Cryptocurrency Legal in Australia?
Yes, Cryptocurrencies are legal in Australia.
Cryptocurrency is not specifically defined as a ‘commodity, and there is no specific legislation that prohibits its use, purchase, or sale.
In September 2017 the Australian Taxation Office (ATO) stated that cryptocurrency would be treated like any other asset for tax purposes.
This includes profit made from trading cryptocurrencies being taxed at full income tax rates of up to 45%.
Cryptocurrencies can also be used to pay your goods and services bill with some retailers/service providers accepting payments via Bitcoin.
The ATO will keep investigating technologies that could make the taxing process easier including cryptocurrency transactions although it’s currently difficult because we don’t have an exchange rate for it.
But they’re still investigating ways of making the taxing process easier including looking into how a transaction is dealt with on an electronic system rather than just cash.
However, Bitcoin and other digital tokens are not considered illegal in Australia.
So you’re free as an Australian to buy, sell or trade Bitcoin and other related cryptos.
Cryptocurrencies aren’t just legal currency, they’re also an investment opportunity.
But there are risks involved with investing in cryptocurrencies as well and this is because Cryptocurrency Investments have no regulation or protection.
With this been said, if you wanted to trade in cryptocurrencies, it would be legal for you to do so.
let’s take a look at…
Top 20 Cryptocurrencies to Invest in Australia
In Australia, Cryptocurrency is not illegal. So if you wanted to trade in cryptocurrencies, it would be legal for you to do so.
Let’s take a look at 20 Cryptocurrencies that are currently popular and worth investing in:
- Bitcoin (The most valued cryptocurrency out there)
- Axie Infinity (AXS)
- Binance Coin (BNB)
- Tron (TRX)
- Cardano (ADA)
- Ripple (XRP)
- Chilliz (CHZ)
- Polkadot (DOT)
- Bitcoin Cash (BCH)
- Stellar (XLM)
- Monero (XMR)
- Basic Attention Token (BAT)
These are truly magnificent projects you can consider investing in as an Australian. Cryptocurrencies in Australia are not illegal so if you want to get into the game, go for it!
However, if you are looking to buy or invest in these coins above as an Australian, you can do that by signing up in the following crypto-exchanges:
- Cryptocurrencies Australia Exchange (CEX)
Otherwise, many of these coins can be purchased through Cryptopia, an Australian-based Cryptocurrency exchange platform that allows traders to purchase and trade cryptocurrencies at a lower cost than the market price.
Is Cryptocurrency Regulated in Australia?
Yes, Cryptocurrency is regulated by the Australian Tax Office.
However, it’s not considered a real currency. Cryptocurrencies like Bitcoin are treated as barter transactions and given fringe status in Australia.
If you use cryptocurrencies to purchase goods or services for your business then you’ll need to declare this on your tax return (including GST).
Cryptocurrency investors may also have to pay capital gains if they sell their cryptocurrency for more than what they bought it for – which would be taxable income that needs declaring.
Exchanges should enroll with the Australian Transaction Reports and Analysis Center (AUSTRAC) in accordance with Part 6A of the AML/CTF 2006 guidelines.
This guideline implies that any elements going about as exchange to buy and sell digital currency convey certain obligations. They should:
- Register as Exchange
- Distinguish and verify users.
- Keep up with financial records
Conform to all AML/CTF reporting commitments
The bottom line is, If you’re wondering how to buy cryptocurrency in Australia, you should first find a licensed exchange to do so. With regulated service providers, you can rest assured that your purchase is protected as it would be with any other financial product.
Do Australian banks accept Bitcoin or any type of Crypto?
No, Cryptocurrencies are not recognized as legal tender in Australia, so there is currently no legislation requiring Australian banks to accept them.
Banks in Australia generally do not accept cryptocurrency as a form of payment. Cryptocurrency is considered to be an intangible asset, and therefore banks are unable to lend against it or guarantee its value.
Cryptocurrencies also have the potential for high volatility which makes them unsuitable for most banking institutions that need stability.
However, it’s important that if you’re wondering how to buy Cryptocurrency in Australia that you find a regulated service provider before doing so.
The bottom line is without regulation there will be many risks involved with investments.
Do Cryptocurrency exchanges need a license?
Yes, Cryptocurrency exchange operators should register for an AUSTRAC Digital Currency Exchange Provider Registration and meet the obligations of that registration including meeting AML.
How can I buy Bitcoin legally in Australia?
Buying Bitcoin in Australia is a straightforward process.
Cryptocurrency can be purchased and traded on some Australian exchanges like Cryptopia, Binance, etc, which are subject to full regulatory oversight by the country’s AUSTRAC agency.
Cryptocurrency itself is not illegal in Australia, but it does fall within AUSTRAC’s definition of “digital currency” or “e-currency.”
If you want to buy cryptocurrency, make sure that your exchange provider has an Australian Financial Services License (AFSL) from ASIC and double-check with them if they have been granted an exemption from complying with the AML/CTF Act.
Alternatively, direct out more about how cryptocurrencies work here before deciding whether this investment opportunity is for you or not.
Is Coinbase legal in Australia?
Yes, But it’s not supported in Australia.
The Australian government has set a regulatory framework for Cryptocurrency which includes taxation, consumer protection, anti-money laundering measures, and investor protections.
Cryptocurrencies are not legal tender in Australia but they can be used to buy goods or services from merchants who choose to accept them as payment.
Now there is no law against using cryptocurrencies for personal use such as trading or investing but it is illegal to issue new coins without authority from the Treasurer of Queensland Treasury Corporation (QTEC).
Is Binance legal in Australia?
Yes, the Binance crypto exchange is legal in Australia.
Binance is a Cryptocurrency exchange that is registered in Malta. Currently, one of the most popular exchanges in the world, Binance has over $600 million worth of daily volume and handled 14% of Bitcoin’s global trade volume on March 20th.
How can I sell my Bitcoin in Australia in 2021?
You can sell your bitcoin in Australia in one of the following ways:
- Cryptocurrency exchanges.
- A person or service that buys bitcoin from you for cash, and accepts Australian Dollars (AUD) as payment.
- You can sell your bitcoins to a gold dealer and get paid AUD by trading them up to an ounce of gold bullion which is then stored on your behalf with the company’s partner vaulting institution until it either mature into a non-bullion form or is redeemed back out again at some later date.
You’ll need to know how much cryptocurrency you have before selling any so if we take Bitcoin for example – every transaction has two parts; a sender address and receiver address, only one of those addresses needs a balance sheet.
Can I convert Bitcoin to cash in Australia?
Yes, one can convert his/her bitcoin and other cryptocurrencies to cash in Australia by meeting with a Cryptocurrency Exchange Business or the Bitcoin ATM.
The Cryptocurrency exchange business is an organization that converts Cryptos to fiat currencies (e.g., USD, AUD).
One should be careful when dealing with Cryptocurrencies as these businesses are not regulated like banks.
This means you may lose all your money if something goes wrong with the company’s operations.
What is the future of cryptocurrencies in Australia?
Cryptocurrency is the future and will undoubtedly be here to stay.
Cryptocurrency is legal in Australia as it doesn’t have any specific laws prohibiting its use or the trading of cryptocurrencies, although some jurisdictions may prohibit carrying on a business involving digital currencies and installations associated with them (eg bitcoin miners).
Cryptocurrencies are not recognized by law therefore they cannot be used for any purposes that involve an investment agreement such as buying shares or bonds.
However, this does not mean there aren’t many other things you can do with cryptocurrency such as selling goods and services within your community without relying on one single centralized system like PayPal, which is often shut down arbitrarily due to political pressure from countries who need their citizens’ money more than others.
Cryptocurrency provides a medium of exchange where people can trade goods and services with each other without relying on one central hub.
Cryptocurrency is not just a digital currency, it’s also an opportunity to create your own economic system outside of the state-controlled sphere where users are free from corruption and exploitation by those who should have been entrusted to protect them in the first place.
Cryptocurrencies are not without their flaws. Cryptocurrencies are fast and efficient, they work 24 hours a day and 365 days of the year.
Is Bitcoin or Cryptocurrency taxable in Australia?
It is not yet clear how Cryptocurrency will be taxed in Australia.
The Australian Taxation Office has confirmed that the ATO, “does not consider cryptocurrencies to be a form of currency for income tax or GST purposes” and that it is currently classifying them as assets.
For this reason, Cryptocurrencies are generally seen as being taxable but without any specific legislation on Cryptocurrencies, there is no hard evidence to prove this statement.
In fact, some long-term investors may find themselves better off if they do hold their Crypto coins until when new rules come into effect exempting capital gains from CGT, provided you use your Bitcoins to purchase goods or services!
Is Cryptocurrency banned in Australia?
No, cryptocurrency is not banned in Australia.
However, it does not have the same status as official currency and thus is subject to regulation by the Australian Taxation Office (ATO).
Cryptocurrencies are generally seen as being taxable but without any specific legislation on Cryptocurrencies, there is no hard evidence to prove this statement.
In fact, some long-term investors may find themselves better off if they do hold their Crypto coins until when new rules come into effect exempting capital gains from CGT provided you use your Bitcoins to purchase goods or services!
Australia has established a pattern of proactive cryptocurrency regulation, with Cryptocurrency regulation being a key priority for the Australian Government.
Retrospectively, it is possible that Cryptocurrencies may be deemed to have been “spent” when they are converted into fiat currencies and transferred overseas (to exchange or the third party).
Cryptocurrency exchanges operating in Australia will need to comply with anti-money laundering regulations and maintain records of transactions involving Bitcoin and other Cryptocurrencies.
Transacting on cryptocurrency exchanges while remaining anonymous is difficult as most require to Know Your Customer (KYC) information which makes anonymity impossible.
The increasing stringency around KYC rules has seen some major trading platforms like Kraken withdraw from the Australian market due to compliance costs becoming unmanageable.
Is trading in cryptocurrency legal in Australia?
Yes, trading in cryptocurrency is legal but it’s important to keep up with the latest legislation.
Users trading cryptocurrency in Australia should make sure they signup on a registered exchange, use a Cryptocurrency wallet and make sure they are operating with the right legislation.
As always it’s important to do your own research and invest responsibly!
Is investing in cryptocurrency legal in Australia?
Australia has always been at the forefront of innovation when it comes to how we use and trade Cryptocurrencies like Bitcoin are one such example.
But is investing in cryptocurrency legal?
The short answer is yes – for now at least!
There are no laws prohibiting or regulating cryptocurrencies yet that have been passed by our parliament (though some states do regulate digital currency).
It’s worth noting that while there is a lack of regulation on legality, the Australian Taxation Office does class bitcoin as property for taxation purposes which means you’ll need to declare any profits if you’re selling your bitcoins.
However, this doesn’t mean anyone can take up running their own bitcoin exchange out of their garage because they will be operating illegally with no licensing.
Is mining cryptocurrency legal in Australia?
This is one of the more controversial questions surrounding cryptocurrencies because it’s not as clear-cut.
Cryptocurrency mining essentially involves solving complex algorithms to generate new coins but in some jurisdictions, this can be seen as a form of money laundering and so there are restrictions on who can do it, how much they’re allowed to produce, and what kind of equipment they use.
In Australia, for example, you need to register with AUSTRAC before you start mining which means getting approval from them first.
Is buying and selling cryptocurrency legal in Australia?
The simple answer is yes, it is legal to buy and sell Cryptocurrency in Australia.
Cryptocurrencies are not recognized as currency within the country but that doesn’t mean they can’t be traded freely and legally with others.
Cryptocurrency trading isn’t regulated by any Australian law so you’re free to trade without worrying about the government’s opinion on your activities.
The only exception would be if a cryptocurrency was being used for illegal or fraudulent purposes which could result in its removal from an exchange or other marketplace.
There have been no cases where cryptocurrencies have been declared unlawful even though there may exist risks of theft due to hacking into exchanges.
However, you should always remain cautious when investing due to high volatility levels and scams happening.
Is Cryptocurrency Legal in Australia – Final Thoughts
If cryptocurrency is not considered legal in Australia, there must be some legal framework that regulates it.
Cryptocurrency can only exist if its providers are able to exchange goods and services for the currency or have access to a government that will allow them to do so freely.
Cryptocurrencies were created as an alternative payment system; however, they currently cannot be used anywhere as a form of tender due to restrictions imposed by banks and governments on payments with crypto.
Cryptocurrencies can still provide anonymity because transactions are stored on distributed ledgers rather than centralized databases like MasterCard, Visa etcetera and use pseudonyms instead of personal information such as name or account number but it does depend on how you deal with your funds.