The Australian senate committee made 12 changes to the present crypto licensing and rules, as well as tax legislation. Australia might lead the digital economy if the laws were friendly, legislators say.
It has been stated by the Senate Committee on Australia as a Technology and Financial Center (ATFC) that present legislation must be revised. “The market has asked for regulation, and we are responding while striving to avoid stomping on innovation,” said the chairman.
In recent years, tax officials in Australia hoped to contact “as many as 350,000 persons who had dealt in cryptocurrencies in the last several years,” according to the Australian Financial Review. According to a story on News.com.au, the government wants to issue a warning to people about completing their tax commitments.
Because cryptocurrencies are now considered an asset under Australian law, its owners are required to pay capital gains tax and file a tax return with the Australian Taxation Office (ATO) if they hold the digital asset for more than a year or earn a financial gain.
News.com.au interviewed H & R Block’s head of tax communications Mark Chapman at the time, who stated that many cryptocurrency investors “have dabbled in this stuff and have not comprehended the tax ramifications” of their investments.
This notification sparked interest among cryptocurrency investors, and the Select Committee proposes changes to provide greater clarity. For example, providing a tax break of 10% to miners who utilize renewable energy may be considered a good thing.
Due to the projected growth of the global digital asset market to $6 billion by 2025, the senators believe that “given the scale of Australia’s existing industry for the custody of traditional assets, there is significant potential for Australia to benefit from becoming a leader in the digital assets space.”
Australia is attempting to attract cryptocurrency businesses
The committee requested the recognition of decentralized autonomous organizations (DAOs), which would result in the establishment of a new regulatory framework. The following is the text of the senators’ report:
“DAOs do not clearly fall within any of Australia’s existing company structures. […] This regulatory uncertainty is preventing the establishment of projects of significant scale in Australia.”
The CEO of Blockchain Australia, according to the Financial Review, stated that “the proposal that Australia looks at recognizing DAO’s structures is a very powerful signal to the world that we are ready to lead this discussion.”
The use of blockchain technology would reduce the need for middlemen, and it has the potential to make Australia a significant location for blockchain firms.
The senators also requested that the Treasury Department investigate the feasibility of establishing a CBDC. This concept has not been well embraced by the Reserve Bank of Australia in the past, but as more nations adopt their own digital currencies and Australia strives to be a leader in the digital currency area, sentiments may change.
According to a poll conducted in September, one in every six Australians now owns cryptocurrency, with Bitcoin “remaining the most popular of the bunch.”
Because Australians have a tendency to diversify their portfolios and because interest in cryptocurrencies continues to rise, the proposed clarity in rules and taxation will be helpful for the growth of their cryptocurrency business. Customers’ and investors’ interests should be protected as soon as possible by putting in place the necessary safeguards.
