Australian tax official claims Bitcoin could one day be deemed legal tender
An Australian tax official has said that virtual currency Bitcoin could one day be considered as legal tender in the country if it was to become more widely used by the public.
Bitcoins can be stored offline with notes and coins
The official told the Guardian that Bitcoins are not currently classified under law as 'legal tender' making them more like a trading commodity than a currency.
The ‘coins’, generated by donating CPU power to data mine complex codes, are widely unregulated. As a result, transactions using the currency are untaxed - an issue governments worldwide are currently trying to address.
On Wednesday during an Australian virtual currency inquiry, Chris Jordan, the Australian tax commissioner, said that Bitcoins were not currently defined by law as ‘legal tender’ adding that the agency was open to amending the TAx Act, if it became neccessary.
Jordan said: “There’s a definition in the Tax Act of money. It’s got to be the legal tender of a country.
"We can’t say it is money. If this grows more and more maybe the definition needs to change.”
Michael Hardy, senior assistant commissioner at the Australian tax office, said: “The ATO has consulted extensively with Bitcoin experts, businesses, industry bodies and other external stakeholders to develop this guidance and explain the obligations of Bitcoin users.
“People involved in buying or selling Bitcoin or other cryptocurrencies - whether individuals or businesses - are encouraged to read our guidance. If their circumstances are not covered by the guidance, they can seek a private ruling by contacting us.”
The virtual currency was growing in popularity among users worldwide with brands increasingly accepting them as payment. Topically, The Drum earlier this year became one of the UK’s first publications to accept Bitcoin payments.
The Australian crypto-currency inquiry follows a similar UK Bitcoin review, launched earlier this month by Chancellor of the Exchequer, George Osborne, in a bid to learn how the financial sector can capitalise upon the currency.