Bitcoin in Australia, the country seeking to become a cryptocurrency hub

Bitcoin in Australia, the country seeking to become a cryptocurrency hub

Bitcoin in Australia has been gaining momentum after the country recognized cryptocurrencies as assets

Cryptocurrencies and Bitcoin have legal status in Australia and are treated as assets. Moreover, the country aspires to become a cryptocurrency hub in the not distant future. Australia's favorable legal regulations on cryptocurrencies have prompted citizens there to work more with cryptocurrencies. In addition, as of 2022, the government announced that it will seek to expand trust in exchanges. The new measure will include the issuance of trust certificates attesting to the credibility of these companies.

Bitcoin evolution Australia require that both exchanges and crypto holders must comply with the Anti-Money Laundering (AML) and Terrorist Financing Laws of 2006. Because Bitcoin is considered property, Australians with Bitcoin are subject to capital gains tax.

Exchanges in Australia

It is mandatory for all exchanges operating legally in Australia to register with the Australian Transaction Analysis and Reporting Center (AUSTRAC). Australian law requires exchanges to enforce KYC policies with their customers and to keep a record of transactions. Exchanges that are not recognized by AUSTRAC risk facing criminal charges and financial penalties.

In 2019, Australia's Investment and Security Commission issued guidance regulating the operation of initial coin offerings (ICOs) within the country and the trade of cryptocurrencies. A year later, that same entity required all exchanges to delist private cryptocurrencies, a specific type of anonymous cryptocurrency.

New measures for exchanges

AUSTRAC has recognized that cryptocurrencies are important for business in Australia. The entity asked Australian banks not to close accounts of cryptocurrency service providers in the country if they comply with anti-money laundering laws.

However, AUSTRAC chief executive Nicole Rose issued a warning in early 2022. In her message, Rose claimed that nearly 400 exchanges were operating in Australia without being authenticated by the regulator as safe companies for investors.

Currently, the Australian government is seeking to regulate the "trust" between exchanges and cryptocurrency investors. Jane Hume, the Minister for the Digital Economy, said that they will establish a marketplace licensing regime for exchanges. All businesses using cryptocurrencies in Australia will receive a certificate of approval.

The government will not protect consumers from market volatility. "But Australian investors will be confident that, if they use an exchange with an Australian license, they will be able to trust that that business will honor its commitment to its customers and have adequate protective measures in place," Hume acknowledged.

Meanwhile, other Australian politicians, such as Senator Andrew Bragg, continue to advocate for a Digital Services Act. This legal instrument will accomplish the dream of turning Australia into a cryptocurrency hub.

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