I previously reported on how cryptocurrency has been legal in Australia since 2013 and Aussies have been able to utilise cryptocurrency as payments to retailers. The post can be found Here Unfortunately the uptake by Australian retailers has been low with only a few coffee shops and niche stores accepting the payment option.
But the benefits of being an Australian has the ability to enable us to purchase, trade and engage with crypto since 2013.
In my above post I briefly went over the tax requirements but it is important to seek professional advice as I could be wrong but from information ascertained if you earn crypto you pay income tax or add it to your annual tax income statement. If you day trade it's CGT event.
KYC is a thing but it isn't onerous the responsibility is on the investor to do the right thing so you need to keep records of your trades in the event the tax department wishes to audit your trading.
Singapore expansion
Like Australia, Singapore is also expanding its crypto industry and beginning to open up and trial new opportunities for its citizens.
As a result Singapore has started taking applications from exchanges to provide services in their island nation. At current Binance Asia has a license to provide services and over 170 other exchanges applied for licensing from the Monetary Authority of Singapore (MAS) Source
Source
The Australian exchange Independent Reserve successfully beat exchanges such as Coinbase to approval and all the other applicants.
The move comes as regulators seek to put in protections against price manipulation and meeting anti money laundering regulations which have been a significant barrier to wide spread adoption.
Source
In a press release which can be found Here Independent Reserve welcomes the acceptance to provide services in Singapore which is seen as a growth country.
Singapore expects that Cryptocurrency trading and the trading of digital assets to increase by 20% to 30% annually over the next few years as widespread adoption begins to take hold Source as a result Singapore anticipates the growth of service providers to also increase and will begin approving exchanges that meet regulatory requirements.
Upon other approved exchanges that relocated to Singapore amidst the mass exodus from China are Huobi Asset Investments and Huobi Mall. The exchanges migrated to Singapore to avoid the nation wide ban in China and seek to continue to offer services just not to mainland Chinese nationals.
Crypto Adoption
It's great that we're now seeing widespread crypto adoption. For me living in Australia having it legal since 2013 but only commencing in 2018 has been a significant barrier to the rest of the world as I haven't been able to utilise the full potential of block chain and crypto trading.
However, I rest easy knowing that my activity on Hive is legal and adding my small annual earnings to my income statement is minute and doesn't actually impact my tax requirements all that much.
It's kind of like a small savings account that I am working to. Participation in Decentralised Finance is also an earning based tax event which makes services like CUB Defi lucrative and suffering heavy losses means I can negate tax. Although my Hive account keeps the cash going across to the ATO.
It's fantastic to see my country welcoming to digital assets and will surely see a significant amount of job creation in the new age of financial services and international money settlements.
At current there are over 230,000 users on Independent Reserve and the ATO estimates 300,000 total Australians trading digital assets.
This shows that even with full legal status there are still many barriers people face in crypto trading and hesitation in widespread adoption.
After all, it is still just fake interwebs money written in code. Well that's the mainstream view.
So the question is how do we drive widespread use and adoption?
Perhaps it's just a matter of time.
images source provided and supplemented by canva pro subscription, this is not financial advice and readers are urged to do their own research or access professional advice
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I am against regulation for the most part but it does look like a lot of crypto related businesses are moving due to the bans.
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In the words of Thanos it is "inevitable" all within reason though. I can't see regulations applying to Hive and there is no reason too.
It's predominantly on exchanges (from an Aussie side of things) making sure they dont steal your cash and that investors are protected from scams.
What you do with your digital assets after the purchase point is upto you and if you lose it, it's on you. That's how Aussies see it. Also if you do fall prey to a honey pot scam, providing evidence of it also writes off the tax for it. ATO isn't interested in punishing and providing punative measures to people. Just focusing on normal trade taxes that apply broadly.
The measure to include crypto income such as Hive and Defi to income statements is a great win.
There are some finer details re once selling it because this may cause a CGT event but I'm hearing it is only on an increase. So for Hive say it pays $1 you just add that dollar to income statement. If you sell at $1 you've already paid the tax on income so not a CGT event.
(Needs clarification and best to talk to a tax professional)
Unfortunately, I claimed all mine as CGT this year (I don't earn that much on the platform) but next time I'll know better.
I think at this point regulation at the exchange layer is inevitable. Especially since they don't want to lose possible customers and the banks could start closing transactions so fiat off ramp or in ramp could be stopped.
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I must look into this CUB finance. the other day I found out that CREX24 will be unavailable for Australians and we should withdraw all our funds befor Octobter the 9th or so
What has your experiences with the platform been like? I've heard that they are not honouring peoples funds and wallet increases. Have you tried removing funds previously?
I only buy in from Aussie exchanges and certified exchanges this ensures my money is my money and Aussie exchanges are backed by ASIC regulations which in part if they lose my cash or run off with it I am covered and the people that do it go to jail or get fined.
Well I don't buy crypto, usually, I earn it. I had an account at CREX24 because they had faucets there, so I'm annoyed that I wasted my time doing them. I have had occasion to use the exchange, I had been accumulating a coin from a Discord server and that coin (MalwareCoin) sold to Modic or something so I turned it into BTC and sent it to my wallet. I have mainly used Coinspot and I have a WIREX card to spend crypto at the supermarket if I need to. Glad to make your acquaintance
The pleasure is mine, I'd be interested in knowing abit more about the Wirex coin as I've been investigating ways to spend it IRL.
I think there are some tax exemptions in Australia which if we spend it as money then we don't pay CGT just the GST (requires clarification though)
Was it hard to apply for?
Hi, it's been nearly 2 weeks since I signed in. When I applied for the Wirex card it was easy, so long as you are able to hold something up and take a photo, it came with US$25 loaded. I also have a coinjar card and have applied for a NEXO one. With both the Wirex and Coinjar cards there is no fee as long as you use it once or twice a year. Wirex gives crypto back in the form of Wirex tokens, the minimum that you can exchange of those Wrex tokens is something like 3,000 though. I usually use Stellar to transfer into it for spending as it's cheap to send. I will just put in my referral link in case you want to use it.
https://wirexapp.com/r/Lookhere
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