Australia to continue taxing cryptos as foreign currency

Category: Asia Crypto Regulatory
Posted by Teuta

Australia’s government has updated its 2022 budget publication and explained that cryptos would continue to be taxed as an asset class and not as a foreign currency.

CBDCs will be considered foreign currency when it comes to taxing

In the release entitled ‘Federal Budget 2022/23 – Resetting for an uncertain future‘, it clarifies that traders are obliged to pay capital gains tax on profit if they choose to sell their crypto assets through centralised exchanges and whenever they choose to trade digital assets.

The crypto sector was disappointed by this decision since there was a glimmer of hope that Australia would tax cryptos as foreign currency ever since El Salvador adopted Bitcoin as a payment method back in September last year.

On the other hand, the government stated that the central bank digital currency (CBDC), would continue to be treated as foreign currency.

eAUD to be launched in January 2023

Mitchell Travers, a former cryptocurrency exchange operator and founder of blockchain consultant Soulbis, was cited in EuroNews as saying that it would be good for the government to take “an enforcement approach to the taxation of crypto assets in its early stages, especially considering the fact that the Treasury is also investing in trying to migrate the traditional technology systems that back our financial system over towards digital assets.”

Australia’s Reserve Bank is currently exploring its own CBDC, dubbed the “eAUD”; a pilot project will launch in January 2023 and is open to industry participants to offer submissions for possible use cases.

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