In recent years, the adoption rate of cryptocurrencies in Australia and New Zealand has been excellent. According to estimates, nearly 13% of Australians already hold bitcoin. Further, a survey revealed that nearly 1 in 4 Australians want to invest in cryptocurrencies. These figures indicate that the future for crypto in Australia is bright.
A similar storyline has been developing in New Zealand, where one in five Kiwis are interested in bitcoin. However, despite these advancements, there has been a slight lack of clarity in crypto regulation in these countries.
This blog looks at the current state of affairs regarding cryptocurrency regulations in Australia and New Zealand.
Brief History
Australia has adopted a fairly positive approach towards cryptocurrencies. The country decided to make cryptocurrencies legal tender during the year 2017. Furthermore, the government announced that bitcoin (and cryptocurrencies that shared its characteristics) should be treated as property. Cryptocurrencies in the country are also subject to Capital Gains Tax. Further, in 2018, the government announced that crypto exchanges operating in the country must register with the Australian Transaction Reports and Analysis Centre (AUSTRAC). However, in 2020, the government announced that privacy coins need to be delisted from Australian exchanges.
Similarly, New Zealand has also adopted a positive approach towards crypto assets. In 2018, the Inland Revenue Department (IRD) announced that cryptocurrencies are treated as property, and taxes should be paid on gains from selling such assets. In addition, although cryptocurrencies are not legal tender, cryptocurrency exchanges, brokers, and wallet providers are regulated as financial services providers.
Current Status
At present, New Zealanders are allowed to trade in cryptocurrencies since these assets continue to be treated as property. However, the New Zealand Financial Markets Authority (FMA) has also issued three warnings. The first warning states that crypto assets are volatile and come with a high degree of risk. The second warning refers to the fact that these are not legal tender. The third warning states the risks associated with hacking.
While Australia has also adopted a positive approach towards digital assets, some aspects remain unaddressed. One issue is that crypto regulation in the country is still fragmented. As a result, there is a need to consolidate the teams governing the trade of crypto assets. Another issue is that the central bank is yet to begin working towards launching its digital currency. Such a step could help the industry immensely.
Future Outlook
These two countries need to iron out the final details of their crypto regulations in the near future. If they manage to achieve this, they would be in an even better position to become attractive markets for crypto trading. In fact, New Zealand is already working towards refining its crypto regulations.
Positive crypto future ahead
To conclude, it is clear that both Australia and New Zealand are considered promising markets for cryptocurrencies. Both nations have announced a certain degree of regulation, although there is still some way to go. Nevertheless, the positive approach adopted by these countries bodes well for the future of crypto trading in this region.
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