In a move to firmly establish Australia as a global leader in financial technology, the Australian government has officially announced that bitcoin will be treated as normal currency.
The official confirmation came in their recently concluded 2017-18 budget summary, in which the government announced plans to make the Australian financial environment-friendly enough for digital currency businesses to operate.
To that effect, the government will ensure that bitcoin, just like the rest of the currencies in use within the country, will not be susceptible to double-taxing.
According to the summary, the move aims to attract even more digital currency firms to Australia by making it easier for them to operate.
General Sales Tax (GST)
Previously, cryptocurrency such as bitcoin was subject to the GST on a purchase and once again during its use, as it was exchanged for other goods and services.
Although the announcement has been made, the implementation of the new policies has yet to take effect, leaving the current consumers of bitcoin to bear the GST twice.
A brief look into Australia’s history of cryptocurrency regulation brings to light the rocky relationship between the government and various digital currency operators in the country, such as bitcoin exchanges.
For many digital currency operators in the country, the sanction of double taxation on bitcoin was the last straw, leading to a mass exodus of reputable bitcoin operators after the legislation was passed in December 2014.
Although the move has been welcomed with enthusiasm, innovation in the fintech (financial technology) sector of Australia has lagged behind significantly, due to the imposition of double taxation on bitcoin.
Nevertheless, the country’s fintech sector is well on its way to recovery shortly after the eradication of the double taxation legislation.
Australia to Capitalize on Recent Blockchain Innovations
The emergence of innovative Blockchain-related deals in the fintech sector have undoubtedly played a hand in the government’s decision to simplify operation of digital currencies such as bitcoin in the country.
Only recently, a promising partnership between the Commonwealth Bank of Australia and Wells Fargo proved that the boundaries of blockchain technology could be pushed by starting a service to send physical goods across the globe using blockchain-based smart contracts.
Going purely by the tone of the recently released budget summary, Australia appears to be adjusting its stance on bitcoin, particularly on its usage inside the country, in a move that expresses the government’s desire to change the environment for cryptocurrency within its borders.
Their commitment to making Australia a leading fintech hub is further emphasized by the announcement of a new package which has been designed to propel Australia’s financial technology industry to the heights of global recognition.
Meanwhile, local Australian businesses appear to be thriving in the wake of the announcement as many remain optimistic that bitcoin will revolutionize the trade and fintech sector of the country.
One notable instance of bitcoin popularity in the country is its use in the payment of household bills through a payment gateway known as Living Room of Satoshi (LRS).
So far, the payment gateway has reached a volume of AU$5 million despite several regulatory hurdles it had to contend over the past few years.