The rate of cryptocurrency adoption has increased drastically in the 21st century. Many countries have gone to the extent of promoting cryptocurrency as a legal tender in their country while others are still in the process. Only a few countries today have remained averse to this present century’s digital technology. The Australian continent has never relented in seeking out possible ways of promoting cryptocurrency transactions in their countries. While cryptocurrency is yet to be made a legal tender within the Australian continent, there is currently no law prohibiting citizens from buying and selling Cryptocurrency.
We have therefore described in this work, the existing government laws on Cryptocurrency and how citizens can freely carry out their crypto transactions without breaking the existing laws. Beginners seeking to learn how to buy and sell cryptocurrency in Australia will find this work an invaluable guide to satisfy their quest.
What is Cryptocurrency?
Cryptocurrencies are digital assets which serve as an alternative means of payment but yet to be legalized in many countries. It is a decentralized Blockchain technology that uses encrypted languages to run smart contracts.
Can one buy Cryptocurrency in Australia?
The Australian continent is one of the most remarkable crypto-friendly nations. Although Cryptocurrency is not yet incorporated as a legal tender in the country it is recognized as a legal property that can be freely bought and sold from the registered exchanges within the continent. The only cryptocurrency prohibited by the Australian government is the issuing of private coins, which has no recognized owners and is subject to rugpull. Therefore one can freely buy cryptocurrency in Australia without any hinderance.
Step-by-step procedures on how to buy Crypto from an exchange in Australia
There are five major procedures to follow in order to buy Cryptocurrency from an Australia exchange. We have discussed them below:
- Select your preferred exchange: Here one needs to choose his favorite exchange from the list of regulated crypto exchanges operating in the country.
- Register an account with the exchange: The next step after choosing an exchange is to sign up for an account with the exchange. Here one is expected to supply such details as name, address, email, age, country, phone number, etc.
- Upload your identity documents: Here one needs to upload his government-approved identity card and any other document stating his address.
- Fund your account: The next step after one’s account has been approved is to proceed with funding. We have listed the various methods provided for funding one’s account by most exchanges in the next heading.
- Move to spot and place your order: The final procedure after one’s account has been funded is to move to the spot position where one can place orders for any Cryptocurrency he wishes to purchase.
Methods used in Buying Cryptocurrencies in Australia
We have already hinted that the best place to buy cryptocurrency in Australia is through the registered crypto exchanges operating in the country. However, there are various options available to the trader for buying cryptocurrency from an exchange in Australia. They are listed below:
- Credit cards
- Debit cards,
- Bitcoin ATM
- Local bank transfer
Factors to consider while choosing an exchange for buying and selling crypto in Australia
Most often we find some crypto traders showing preference for a particular crypto exchange over another. This is based on the attractive features found in such exchange. There are some important features that elevate an exchange over every other exchanges operating within the same region. These features are always borne in mind while choosing a crypto exchange in Australia. We have discussed them below:
- Regulation: All crypto exchanges operating in Australia must be under the Australian financial regulatory body known as AUSTRAC. Any crypto exchange operating in the country without registering with this body is considered illegal.
- The volume of transactions: An important feature that attracts more traders to a particular exchange is the volume of transactions carried out on the exchange. An exchange with a high volume of transactions increases the liquidity which helps to reduce slippage.
- Accessibility: All crypto exchanges are expected to make their platforms very easy to use and with a proper user manual for beginners.
- Multiple options for deposits and withdrawals: Adding multiple options for deposits and withdrawals makes the deposit and withdrawal process a simple one. It is therefore very important that all crypto exchange should diversify their methods of deposit and withdrawals to suit the available means for the Australian traders. Equally, it is important to provide options for depositing and withdrawing funds using the Australian dollar (AUD).
- Customer support services: Having an efficient customer support service gives traders the conviction that the exchange care so much about the security of their funds. It is therefore very necessary that a crypto exchange should have easy outlets and channels through which traders could pass on their complaints to the management and have them resolved immediately.
- The number of cryptocurrencies offered: The ability to integrate a large number of cryptocurrencies into an exchange is a very important factor that attracts more traders to a given exchange. Crypto traders have their wide range of preferences over time. Therefore good crypto exchange must be dynamic in listing new Cryptocurrencies on their platform to satisfy the traders’ demands.
- Educational contents: Providing rich educational content about any listed cryptocurrency on an exchange helps new traders to decide which coins match their preference for buying and selling. Therefore any crypto exchange to be selected must provide rich educational contents to assist traders in making decisions.
- Trading fees and Commissions: Crypto exchanges charging high commissions for using their platforms are highly discouraged for trading. Charging lower fees for all transactions is an important mark of a good crypto exchange.
Is Crypto trading legal in Australia?
There is no law prohibiting the trading of cryptocurrency in Australia. All digital assets including Bitcoin altcoins and all crypto exchanges are considered legal in Australia.
However, all crypto exchanges operating in Australia are mandated to register with the Australian Transaction Reports and Analysis Centre (AUSTRAC). This body regulates all the financial activities in the country and helps to prevent abuses and criminality. Any crypto exchange operating in Australia which fails to register with the AUSTRAC is subject to criminal charges and severe penalties once discovered.
The only cryptocurrency that the government kicks against as a way of protecting the interest of its citizens; is the private coin offering which is an anonymous form of cryptocurrency subject to rugpull without any means of identifying its owners. Based on this, the Australian regulatory body in August 2020 requested all Crypto exchanges operating in the country to delist all privacy coins in their exchange and any exchange that fails to abide by it faces government sanctions.
What are the most traded cryptocurrencies in Australia?
Australian traders are predominantly long-term crypto investors, hence a great majority are attracted to high-volume Cryptocurrencies which offers them great stability for either longing or shorting the market. Hence the following ten Cryptocurrencies readily emerge as the most traded today:
- Binance Coin (BNB)
- Ripple (XRP)
- Cardano (ADA)
- Bitcoin Cash
Is Crypto trading taxable in Australia?
All Incomes from Cryptocurrency trading in Australia are considered Capital gains and subject to taxation.
The Australian Taxation Office (ATO) has an established severe punishment for violating these laws in which case a penalty of 75% extra charges would be collected as tax for anyone who fails to report his Capital gains from crypto trading to the relevant authority for proper deduction of taxes.
Above all, cryptocurrencies are considered legal properties in Australia and this makes all crypto transactions subject to the Anti Money Laundering and Counter-Terrorism Act promulgated in 2006.
Is Cryptocurrency a reliable investment in Australia?
Cryptocurrency investment is often associated with high risk. This is because there is no control over the market volatility. The only confidence that the citizens have while indulging in Cryptocurrency trading in the country is that all crypto exchanges functioning in Australia are registered with the government and bound to provide maximum security for investors’ funds.
However, in cases of losses arising due to high market volatility, there is usually none to be held responsible for such losses. Therefore crypto traders are always advised to invest only the amount they can afford to lose.