From April 19th to the 22nd, the first-ever Blockchain Australia Week was held. This was the largest blockchain event ever on the continent. In just four days, blockchain professionals and enthusiasts came together and discussed a wide range of topics and current trends related to blockchain technology. The significance of Blockchain Australia Week cannot be ignored. In Australia, digital trade is estimated to be worth $192B in the domestic economy, and digital goods and services are the fourth largest export sector.
It’s evident that Blockchain Australia Week has had an impact on the Australian digital currency market. Experts came from all around the globe to discuss various topics surrounding digital currency and the influence it’s having on traditional banking institutions and trust systems. In addition, several fireside chats, breakout rooms, industry discussions, and other events were held to both educate and inform attendees of the ever-changing landscape of digital currency and where it fits in the big picture of finance.
Today, we’ll take a look at the three key takeaways that emerged with all the opportunities to learn and discuss the evolving technology surrounding digital currency during this year’s big event.
One of the main topics at Blockchain Australia week was the regulation of digital assets. As the surge in demand for Bitcoin and other cryptocurrencies grows, Australia will need regulatory oversight of the digital assets market. Australia is behind some other major markets in regulating cryptocurrency, such as the US, Europe, Singapore, and Hong Kong that have successfully regulated digital financial products.
The digital assets exchange, BTC Markets, believes there are significant gaps in Australian regulation regarding the digital asset market. Although the technology and ideology emphasising cryptocurrencies were difficult for traditional markets to accept, large financial institutions are developing and understanding the fundamentals. According to BTC Markets, digital finance is growing rapidly in Australia. They argue that Australia needs to keep ahead of the change by instituting legislation tailored to technological advances and setting international standards for blockchain use.
When it comes to taxation, the assumption is often that cryptocurrency gains are only taxable when digital assets are converted into fiat money. According to the ATO (Australian Taxation Office), this is incorrect. Digital coins are not a currency but are classified as assets. Gains from cryptocurrency trades are like gains from other investments. For example, if you buy 1BTC when it’s worth $3,000 and then sell it when it’s worth $10,000, you are likely to incur a tax on that sale. The profits or losses get taxed, and depending on the situation, they may get taxed in two different ways.
You can do several things to understand cryptocurrency tax obligations to ensure you’re compliant with all ATO regulations. These are:
- Hold your crypto for more than 12 months – when held for 12 months or longer, you may be eligible for a 50% CGT discount.
- Research – Carefully read the ATO’s guide to taxation on cryptocurrencies and make sure you understand the taxation on all facets of cryptocurrency investing and purchasing.
- Plan ahead – Be clear with your intentions about how you plan to use digital currency before making a purchase. For example, if you initially purchase BTC for personal purchases but later decide to hold it for profit, make sure you understand the potential tax consequences.
- Keep Records – Keep track of crypto transactions as you complete them. It is much easier than searching for the information you need come tax time.
- Deductions – See if you’re eligible to claim any deductions for expenses related to crypto transactions.
- Disclose – Don’t assume that your transactions are untraceable or that you don’t have to disclose the details of transactions. The ATO is targeting digital currencies, and there are penalties for non-disclosure, some of which are severe.
The most valuable piece of advice regarding cryptocurrency taxation is to speak to a cryptocurrency expert.
The boom of cryptocurrency trading and investing has created a surge of innovation in handling and trading digital assets. Companies are clamouring to get to the top of the heap and be hailed as the best asset management and trading company out there. Experts forecast that 2021 will show an increase in the use of federated blockchain because it provides a more customisable experience than through a private blockchain.
Federated blockchain is similar to a private blockchain, but it has a few added features. With federated blockchain, multiple authorities control pre-selected nodes, unlike private blockchain that is controlled by one organisation. In addition, the authorities selected from various nodes can validate the block to process transactions further.
In addition to using federated blockchain, companies like Amazon and Microsoft are starting to use Blockchain as a Service (BaaS). This allows for digitised products through working with the blockchain. An article by Analytics Insight provides additional trends coming for 2021 and believe that right now is a significant time for emerging digital asset technology in various industries.
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