2021 was a big year for all of us, as human beings, let alone as crypto users!
The Australian Government has recognised the increasing importance placed on cryptocurrency by Australian citizens, and as such, has done some work towards developing new guidelines and legislation to better suit the evolving industry.
In recent months, the government has released the terms of reference for a review to be undertaken by the Board of Taxation into the appropriate policy framework for the taxation of digital assets and transactions in Australia, as well as having released a paper seeking feedback by the end of May 2022 on the proposed crypto asset licensing and custody requirements. This is part of a broader token mapping exercise the government is working to complete by the end of 2022.
These two developments follow an earlier policy proposal led by Liberal Senator Andrew Bragg, which prompted the government to regulate everything from crypto taxation to digital asset exchange licensing.
The Australian government hasn’t been the only one to throw their hat into the metaphorical ring either: the Australian Transaction Reports and Analysis Centre (AUSTRAC) released a guide on “preventing the criminal abuse of digital currencies in financial crime”, which set forth instructions for businesses to detect tax evasion, terror financing, scams and money laundering. The Australian Prudential Regulation Authority (APRA) also offered some thoughts; seeking potential approaches to the “prudential” regulation of stablecoins by proposing bringing them into the fold of the regulatory framework governing stored value facilities (SVF).
All of this bureaucratic attention means that crypto is finally starting to be taken seriously by the powers that be. The ATO recently argued in the Federal Court of Australia that it would take at minimum nine months to decide whether taxpayer gains from the disposal of crypto would be considered as part of the revenue account or capital account. We’ll all wait and see what the outcome of the May 2022 paper is, and will do our best to keep you updated and informed on any developments.
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