How Governments are Responding to Digital Currencies
Governments around the world are responding to digital currencies in a variety of ways — some are looking to take cryptocurrency mainstream while others have banned it altogether.
Bearing in mind that everything crypto changes quickly and often, here are some examples of government responses at the time of writing.
Trading in cryptocurrencies is legal in Australia, but they are considered to be property rather than legal tender.
How you use them affects their treatment under taxation law. For example, cryptocurrencies may be subject to capital gains tax (CGT) if acquired for investment purposes, but tax-exempt if used to buy goods (under $10,000 in value) for personal use. When a digital currency is used in a business, it is treated as part of ordinary revenue and expenses and is subject to the same tax rulings, including for GST.
As cryptocurrency exchange platforms are not highly regulated in Australia, the federal government has issued warnings on the risks associated with investing in digital currencies.
In general, Japan is considered a very progressive and friendly environment for cryptocurrency trading. The Japanese government has recognised Bitcoin as legal currency since 2017, under its Payment Services Act (PSA). The PSA also regulates digital currency exchanges in the country.
Japan also has its own digital currency known as J-Coin Pay, which was created by some of the country’s banks.