The Australian Senate's Economics References Committee announced this week it would hold an inquiry into bitcoin and digital currency implications, aiming to present its findings to parliament in March 2015.
A further aim is to help decide Australia's framework for regulating and taxing digital currency-related activities, in the hope that legal clarity will see the country take a leading role in developing the new technology.
Ronald Tucker, who heads industry lobby group the Australian Digital Currency Commerce Association (ADCCA), welcomed the news and praised both Senator Dastyari and the Economics References Committee for its foresight on the matter.
In a statement, Tucker said:
By encouraging innovation and entrepreneurship, he said, Australia's parliament will help create more jobs and make the country a financial technology leader.
Tucker also called for "a correction" to Australia's current tax treatment of bitcoin provided by the Australian Tax Office (ATO) in August.
Many in Australia's bitcoin industry expressed dismay at the definition of digital currencies as a taxable supply, a condition that adds 10% to the price of bitcoins sold on Australian exchanges and forces businesses to keep detailed records of transactions and price fluctuations.
In August , the ATO defined bitcoin and digital currencies under existing tax laws, which subjects them to Australia's Goods and Services Tax (GST) for sales and Capital Gains Tax (CGT) in a manner similar to assets such as equities.
For customers converting bitcoin to Australian dollars, it said, "the guidance is more complicated". People converting bitcoin for personal use up to $10,000 would not be subject to tax, but anyone selling bitcoin on behalf of a GST-registered business would need to keep tax invoices for every transaction.
CoinJar also joined the call for changes to tax rules:
Call for self-regulation
The ADCCA is promoting a self-regulatory approach to digital currency industry governance, stating the following in a newsletter:
Australia will host a summit for G20 nations in Brisbane this coming November, and Tucker sees this as a great opportunity to discuss issues surrounding new currency concepts in a formal setting; hopefully, he said, with Australia as the leading voice.
The ADCCA also participated in last month's Responsible Finance Forum in Perth, organised in part by the World Bank, IMF and G20. Digital currencies and surrounding issues were "very much a hot topic" at the event, the association said, adding that was a forerunner to the main summit.
Australian Senate image via Shutterstock
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.