Australia considers regulating Bitcoin as currency

Parliment House, Canberra

Parliment House, Canberra

In a recent development, Australian senate’s Economics References Committee made a report and reviewed the digital currencies in Australia. Their finding is that all cryptocurrencies should be treated as currency for the purposes of Goods and Services Tax (GST) rather than intangible asset – the stance which Australian Taxation Office (ATO) maintained previously.

The previously held stance of ATO was not welcomed by the Bitcoin business community in Australia with many businesses criticizing and warning to move to other more digital currency friendly countries in order to avoid financial penalties.

The report recognized that the previous stance was affecting the Bitcoin business owners negatively and was putting unnecessary pressure on new startups.

Senator Sam Dastyari who chaired the committee said that:

“Without a doubt, the main benefit will be the confidence and certainty that removing a GST will provide to our own digital entrepreneurs, and the foreign businesses who want to set up here,” he said. “Most importantly, it will send the message to local tech entrepreneurs that their government is listening to them, and that in itself is a major step forward.”

Many digital innovators considered the previous stance as a way of government to stimulate Bitcoin Businesses and the new ruling is said to have a massive impact among the crypto community. This will not only affect Bitcoin exchanges but basically all business that accept cryptocurrencies.

However this ruling has not been passed in Senate yet but according to the Australian press, Senate is expected to make the recommendation in a few days.  Dastyari also said that, presently full support is not available for regulating Bitcoin, as some representatives want to test and see what financial opportunities Bitcoin technology offers rather than to push it away with regulation.

The 74 pages detailed report also mentioned risks involved with regulations and acknowledged that more development needed to be done on Bitcoin for it to regulated by the Australian Securities and Investments Commission and other regulators.

The review has received responses from almost 48 companies and individuals suggesting and sharing their knowledge of the cryotocurrency. The most prominent response has been from Ripple labs that said “Harmonizing a global standard for digital currencies could provide clarity and an even playing field for technologists and companies that innovate using digital currencies”

The expected date for submission of the report to the Senate is said to be August 10. Many Bitcoin enthusiasts are hoping that this regulation will help digital innovators across Australia improve their relationship with the government while also helping their businesses grow.

If the regulation passes then Australia will join the ranks of the few countries that consider Bitcoin as currency just like UK which passed the resolution last year to treat Bitcoin as currency and exempted it from Value Added Tax.

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