Changes Coming For Cryptocurrency and Digital Assets

It is estimated that more than 800,000 Australians participated in the crypto/digital assets market in the last three years. According to the ATO, 2021 saw a jump in participants of 63% compared with the 2020 year.

However, this surge in participation and the associated losses from financial scams have amplified calls for regulation. 

To placate the various voices calling for increased regulation of the digital assets space, the government has released a terms of reference for a review by the Board of Taxation into the appropriate policy framework for the taxation of digital transactions and assets such as cryptocurrency in Australia. 

The Board of Taxation has been tasked with consulting with taxpayers, tax representative bodies, industry stakeholders and academics on the implications of various digital assets and transactions without increasing the overall tax burden. Specifically, the Board will consult on: 

  • the current Australian taxation treatment of digital assets and transactions and emerging tax policy issues;
  • the awareness of the taxation treatment by both retail and wholesale investors and those transacting in digital assets as part of their business;
  • the characteristics and features of digital assets and transactions in the market, including the rapid evolution of technology supporting the broader digital asset ecosystem;
  • analyse the taxation of digital assets and transactions in comparative jurisdictions and consider how the international experience may inform the taxation of digital assets and transactions in Australia; and
  • Consider whether or not any changes to Australia’s taxation laws and their administration are warranted in the context of digital assets and transactions, both for retail and wholesale investors.

It is expected that the review will be completed by 31 December 2022. At the same time, the government has also released terms of reference covering its request for advice from the Council of Financial Regulators (CFR) on potential policy responses to address the issue of de-banking for financial technology firms and digital currency exchanges and remittance providers. It is expected that the CFR will provide advice to the government by the end of June 2022. 

Make your voice heard. 

If you have a view on the tax treatment, digital assets, or the proposed licensing regime, we can help you submit your opinions and thoughts. Digital assets and payment technologies are growing worldwide, and a variety of informed views would help make the Australian framework more robust for the future. Contact us for more information on enquiries@rm.net.au

**The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.

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