Is Bitcoin legal in Australia?

Good evening Mr Chairman, Ladies and Gentlemen, today I want to talk to you about the law and order when it comes to Bitcoin.

The Reserve Bank of Australia (RBA) governor has declared Bitcoin legal in Australia since December 2013.

Recently, cryptocurrencies have gained a lot of popularity, such as Bitcoin.

If you’re new to crypto and live in Australia, you might have wondered, is Bitcoin legal here?

Bitcoin is one of the most popular cryptocurrencies in the world. It was introduced by the mysterious Satoshi Nakamoto in 2009. It is currently worth around $69,671 in Australian Dollars.

Since Bitcoin is legal in Australia, you can do a lot with it since it’s not related to the Australian financial market.

Bitcoin introduces a new financial dimension that is not subject to market impacts, nor does it fall under the control of the government or even come close to governmental regulations.

With Bitcoin you can pay for goods and services, make Bitcoin purchases from Coinspot, or even trade cryptocurrencies. Once on the cryptocurrency exchange, you can even convert Bitcoin to Australian Dollars.

Let’s consider Bitcoin’s safety for Australians and its legality in Australia. We will also consider Australian tax regulations on Bitcoin.

What is the legal status of Bitcoin in Australia?

Bitcoin is a decentralised cryptocurrency, and Australia was one of the first countries to catch on to its hype. Although its crypto market isn’t the largest in the world, it’s growing at a tremendous rate.

However, some concerns have been raised about Bitcoin’s legality by Australia’s Governor of the Reserve Bank.

This is mostly because in 2019, over $515 million in Bitcoin was spent on illegal activities, some of which may have involved money laundering. Although this is only 1% of Bitcoin transactions, it represents a significant amount of money.

Bitcoin’s decentralised nature protects its users’ personal information, allowing anyone to transact anonymously on the network.

The majority of cryptocurrency exchanges require users to provide their social security numbers, but some illegal traders may provide Bitcoin to do money laundering.

The Bitcoin network (or blockchain) maintains a public ledger regarding public addresses and transactions. So, using the public address, you can view different individuals’ Bitcoin balances and transactions.

The disadvantages of Bitcoin‘s decentralisation are both advantages and disadvantages. No government (even the Australian one) controls this cryptocurrency, so individuals can easily move their assets from one country to another.

A number of nations have already enacted anti money laundering measures for cryptocurrency practitioners and exchanges due to this concern.

The security of cryptocurrency is greater than that of traditional currency. Hackers cannot gain access to your bank account or credit card details and steal your cryptocurrency.

Unless someone gets their hands on your private key, the digital coins in your digital wallet are safe.

You are not using Australian currency or a foreign currency. Rather, you will be using a capital asset, which may be subject to capital gains tax depending on your tax classification.

If you’re not familiar with your tax classification or any tax implications relating to Bitcoin, you may want to talk to your accountant before getting Bitcoin.

In Australian law, Bitcoin is not listed as illegal, however this may differ from country to country.

Some countries such as China, Russia, Nepal, Ecuador, Bangladesh, etc. prohibit Bitcoin and any services it may provide as they view it as a threat to their current financial system.

Governments are forcing regulations where anyone has to report their virtual currency transactions no matter how small the value.

Bitcoins held for less than a year are subject to short-term capital gains tax, while holding them for more than a year makes you liable for long-term capital gains tax.

Bitcoin investing is just like investing in an asset, which is how tax agencies see it. Even though Bitcoin is virtual and decentralised, the government keeps it under some form of regulation.

It is built to make the financial system more efficient and secure, contrary to some countries’ perception that Bitcoin is a threat to it.

Because Bitcoin is legal in Australia, why not consider adding some Bitcoin to your portfolio?