Is Bitcoin Legal in Australia? Beginner’s Guide to Regulation
Bitcoin is 100% legal in Australia. It’s legal to buy, sell, trade, spend, receive, and store. However, there are many more important questions.
Can you use it to pay for day-to-day transactions? How is it taxed? Is it safe to buy? What about other cryptocurrencies? As an Australian regulated cryptocurrency exchange with tens of thousands of members, we get asked these questions all the time.
In this beginner’s guide to bitcoin’s legal status in Australia, we cover these questions and more.
Everything you need to know about bitcoin’s legal status in Australia
When did bitcoin become legal in Australia?
Bitcoin’s legal status gained clarification in 2013 when in an interview about bitcoin the governor of the Reserve Bank of Australia (RBA) stated “There would be nothing to stop people in this country deciding to transact in some other currency in a shop if they wanted to. There’s no law against that, so we do have competing currencies.”
Can I use bitcoin to pay for day-to-day transactions in Australia?
Yes, bitcoin can be used for personal or business transactions in Australia. You can pay for coffee, a car, or even a house with bitcoin.
However, just because you want to pay with bitcoin, doesn’t mean a business has to accept it. It’s everyone's choice whether they accept bitcoin as payment or not.
How is bitcoin taxed?
For tax purposes, bitcoin is treated as property like a house or car and is subject to Capital Gains Tax. However, as the ATO has noted, if you’re using bitcoin for day-to-day transactions rather than as an investment, Capital Gains Tax does not apply.
Is bitcoin legal tender in Australia?
First, what does ‘legal tender’ mean? Legal tender means money that is recognised by the legal system as a form of money and can be used to meet a financial obligation, including your taxes. Bitcoin is not currently legal tender in Australia. So while it is legal to buy and sell goods and services with bitcoin, you cannot currently use it to pay your taxes.
Notably, El Salvador was the first country in the world to make bitcoin legal tender.
How are bitcoin exchanges regulated in Australia?
Bitcoin exchanges are well regulated in Australia to ensure consumers are protected and no illegal activities are conducted with bitcoin or other cryptocurrencies.
In 2018, the Australian Transaction Reports and Analysis Centre (AUSTRAC) began regulating Australian cryptocurrency exchanges. This was an important step because it ensured all Australian exchanges comply with Australia’s strict Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) laws. Furthermore, exchanges are required to register as an exchange, identify and verify users, and maintain financial records.
How popular is bitcoin in Australia?
Australia’s proactive bitcoin regulation has helped make bitcoin incredibly popular within the country. With 1 in 5 Australians owning crypto, there are certainly many ‘hodlers’ amongst us.
Here’s a quick overview of bitcoin’s popularity:
- 1 in 5 Australians own crypto
- Bitcoin is the most popular cryptocurrency in Australia
- Self Managed Super Funds are adding bitcoin to their portfolio
Is bitcoin safe to buy in Australia?
It is safe to buy bitcoin in Australia. Millions of Australians have successfully purchased and stored their bitcoin safely. Still, you should always take precautions to keep your coins secure.
Firstly, it’s recommended that you buy bitcoin from an Australian regulated exchange like Cointree. With Australian regulators' high standards for exchanges, they’re seen as some of the premier crypto exchanges in the world. With that being said, you should always select the best bitcoin wallet in Australia to store your bitcoin safely.
At Cointree, we go above and beyond industry best practices to make sure your coins and your account are completely secure. With bank level encryption and a number of Fund Protection Features, you can trade with confidence on Cointree.
Are other cryptocurrencies legal in Australia?
Yes. Cryptocurrencies are legal in Australia. For example, on our exchange, you can buy and sell over 160 different cryptocurrencies.
Future bitcoin regulation in Australia
Australia has proven to be a proactive regulator of bitcoin and welcoming to the exciting innovation within the crypto space. With both bitcoin and other cryptocurrencies legal, Australia can be a leader in this new digital economy.
Disclaimer: Information provided is for educational purposes and does not constitute financial product advice. You should obtain independent advice from an Australian financial services licensee before making any financial decisions.