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Australia Won’t Tax Cryptocurrency As A Foreign Currency

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Over concerns about crypto assets, the Albanese government has stated that crypto will continue to be excluded from foreign currency tax arrangements.

Yesterday, El Salvador’s decision to recognise Bitcoin as legal cash was a factor in the decision-making process, according to the announcement made by Treasurer Jim Chalmers and Assistant Treasurer Stephen Jones.

According to reports, the action “may” lead to “uncertainty” on how Bitcoin and other cryptocurrencies will be taxed in Australia.

For the time being, digital currencies will continue to be taxed like capital gains, which the government believes is necessary.

“This clarification will deliver a consistent tax requirement for crypto-asset holders and will be backdated to 1 July 2021 for the avoidance of ambiguity following the decision by the Government of El Salvador,” the treasurers said.

“This gives certainty and clarity at a time of volatility for cryptocurrencies.”

The system surrounding digital currencies and how they are taxed, according to Mr Chalmers, will continue to be evaluated as it develops.

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The new PM Anthony Albanese has cryptocurrency high on his agenda.

Creating a structure and legislation surrounding the use of digital currencies is one of the primary problems he wants to address in Australia. It is anticipated that the new administration would continue the crypto work that Morrison’s administration started.

With the demise of Luna and the decline of Bitcoin and Ethereum over the past month, the cryptocurrency industry has been in a state of panic.

After reaching its peak of US$69,000, Bitcoin dropped to less than US$20,000 for the first time since December 2020. The incident also had an impact on Ethereum, which last week fell to US$1661 after losing 15% of its value.

According to estimates, the crypto market lost approximately $2.86 billion, which was mostly caused by the increase in interest rates.