Australia’s treasury department has carved out new guidelines limiting the size of cash-based currency payments, but cryptocurrencies have been excluded from the draft legislation.
To help combat tax evasion, the government department proposes a “limit of $10,000 for payments made or accepted by businesses for goods and services”.
Under the proposed legislation, transactions that are equal to, or in excess of this amount would need to be made using electronic payment systems or by cheque.
The proposal provided a list of exceptions, however, that would exempt payments to this limit. Among these was “payments that only exceed the cash payment limit because payment is or includes an amount of digital currency”.
The treasury department explained that given the cryptoasset sector was a “new and developing” area of the Australian economy, digital assets – unlike physical currency – do not have a “firmly established regulatory framework or industry structure”.
This makes it difficult to apply the cash payment limit in a way that would not largely prevent the use of digital currency in Australia or significantly stifle innovation in the sector.
Black Economy Activities
Taking something of a departure from the concerns of global regulators regarding the use of cryptocurrencies for money laundering or other criminal activities, the proposal said:
At the same time, there is little current evidence that digital currency is presently being used in Australia to facilitate black economy activities. Given this, the Government has decided at the present time to effectively carve digital currency out from the cash payment limit.
This light-touch position on cryptoassets will remain under ongoing scrutiny, the treasury department said. This would ensure that the “exemption for digital currency payments remains appropriate in light of the current use of digital currency in the Australian economy”.
The department added that the draft proposal was released for public consultation and that it was planning to implement the cash payment limit starting on January 1 next year.