AUSTRALIA SET TO LIMIT CASH PAYMENTS BUT NOT CRYPTOCURRENCY

AUSTRALIA SET TO LIMIT CASH PAYMENTS BUT NOT CRYPTOCURRENCY

Australia’s Department of Treasury has recently published a new set of guidelines under the Currency (Restrictions on the Use of Cash) Act 2019, and it is not surprising to see that cryptocurrency has made the exceptions list.

The draft legislation, which puts forward a new set of preliminary guidelines that govern the size of cash based currency payments, proposes that a,

“Payment limit of $10,000 for payments made or accepted by businesses for good and services.”

Further stipulating in the draft that,

“Transactions equal to, or in excess of this amount would need to be made using the electronic payment system or by cheque.”

These limits have been proposed after the Treasury Department’s Black Economy Taskforce in 2018 suggested that by implementing these certain limits on currency transfers would significantly assist with combating tax evasion and other criminal activities.

Amongst the proposal was a detailed list of situations under which payments are not subject to the cash payment limit, one particular one being the use of cryptocurrency,

“Payments that only exceed the cash payment limit because payment is or includes an amount of digital currency.”

The draft goes into much lengthier detail providing greater clarity on digital payments, along with the specifics of their exemption from the cash payment limit. According to a document released by the Department of Treasury,

“Digital currency is a new and developing area in the Australian economy. Unlike physical currency, it does 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.”

“At the same time, there us 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 position will remain under ongoing scrutiny to ensure that the exemption for digital currency payments remains appropriate in light of the current use of digital currency in Australian economy.”

We can expect to see these changes in the cash payment limit come into effect starting on 1st January 2020.

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