The Australian Government has clarified that cryptocurrency will continue to be taxed as an asset class instead of a foreign currency in its 2022 budget released on Tuesday.
See related article: What does the new Australian Labor government mean for the crypto industry?
Fast facts
- This means cryptocurrency transactions are subject to capital gains tax where a profit for the year was made and if done through centralized exchanges.
- “This is the first time crypto has been recognized in the budget and is emblematic of the widespread recognition that cryptocurrencies are certainly a component of the future financial system,” Jonathon Miller, Australian head of the U.S.-based cryptocurrency exchange Kraken, told Forkast in an email.
- Budget papers also said that any central bank digital currency (CBDC) would continue to be treated as a foreign currency, however.
- 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.
- This is the first budget the Labor Government has released since being elected in May. It had previously committed to a “token mapping” scheme to better understand the digital asset industry and different token types before passing further regulation in the space.
See related article: RBA opens submissions for 2023 CBDC pilot