One of the major topics surrounding the 2025 Australian election was cryptocurrency. As adoption rates continue to climb in Australia, regulators are faced with the growing task of providing legislation that promotes innovation, protects investors, and encourages adoption.
A major part of that topic of discussion is the handling of taxation of crypto assets. Regulations are probably not as clear as they could be, but a recent poll shows that nearly 58% of Australians want to see some kind of tax reform that favours crypto holders in the wake of the election.
As it stands, there is still considerable uncertainty about taxation as it relates to cryptocurrency taxation. Reforms would provide not only more favourable conditions but also greater clarity for those who regularly hold digital assets.
Australian Government Official Response
While there are those who seek to avoid having to pay crypto tax, others have kept a keen eye (and ear) on what’s happening in government. For instance, in March 2025, the Australian Government made an official response to the Board of Taxation’s official review regarding the taxation of digital assets.
The official response was that there would be no new laws that are crypto-specific—for now. Investors may perceive this as an opportunity to relax and potentially avoid the burden of filing taxes on crypto assets. What it should be seen as is a coming shift towards ATO guidance and oversight.
Compliance Matters Despite No New Laws
Though there are no plans on the horizon to introduce new tax legislation, there is an emphasis on current rules like income tax, capital gains tax, and GST. For those who have been seeking tax reform, it is a disappointing move, as the current rules don’t quite fit the purpose.
The Board of Taxation has identified areas that do need further guidance, like DeFi taxation, bridging, and wrapping. That said, the Board is still taking a “wait and see approach” rather than charging out ahead and implementing new rules that don’t properly take the nuances of crypto into account.
Those who are flipping NFTs or have an active hand in DeFi or regularly stake/trade need to be aware that their activity remains taxable. Accurate reporting means perhaps more now than ever, so make sure that you are adhering to current laws.
ATO at the Forefront
The Australian Treasury Office is now the leader when it comes to providing tax clarity on digital assets. Specifically, the organisation formed a cryptogroup tasked with consulting industry experts and ultimately publishing new guidance on the matter.
The ATO has been known to provide guidance via its website recently. That said, there haven’t been new public rulings related to crypto tax in more than a decade. Although no proposed timeline exists for any changes, it would not be surprising to see clearer rules elaborated upon. Keeping records across wallets and chains will be imperative, especially as there is a continued push for clearer regulations in the industry.
Framework for Key Changes
While nothing official has been done, the Australian Government did indicate that any framework for crypto tax will be built around four pillars: neutrality, simplicity, integrity, and competitiveness.
The goal will be to treat crypto like any other traditional asset, such as stocks and bonds. Simplicity in the rules will make things clearer and far more manageable than they currently are. There will be further goals to reduce loopholes and limit the chance for evasion while also driving innovation to keep Australia in lockstep with its global peers.
2025: A Year of Transition as Broader Regulatory Picture Comes into Focus
Despite the absence of official announcements, it is evident that the Australian government is establishing the foundation for a long-term initiative. The ATO is at the helm now because legislative change will definitely take time. That said, compliance expectations are on the rise, so action will be coming.
The ATO has invested heavily in data-matching programmes and has been using AI to identify potential taxpayers to audit not just in crypto, but in all areas of the economy. The more investors know about the risk flags, the better prepared they will be for a potential audit.
Though the tax response is necessary, the Treasury also issued a statement on developing an innovative Australian digital asset industry. One of the biggest steps will be the licencing framework as it relates to digital asset platforms (DPAs) with a focus on platforms that either trade or hold assets for their customers.
Stablecoin payments are expected to be regulated under current stored-value facility (SVF) laws as well as the APRA. Both will continue to use the existing ASFL framework rather than a separate crypto regime. They will both apply obligations for financial services, things like client asset protection and capital adequacy, to crypto.
Game-Changing Court Ruling?
One thing of interest as it relates to the taxation of cryptocurrency in Australia is a recent court ruling. That ruling hints that Bitcoin could be classified as currency in the country, removing capital gains tax.
The decision is under appeal, but a ruling by Victorian Magistrate Michael O’Connell in a Bitcoin theft case suggested that Bitcoin could be recognised not as property but as Australian currency. The statement is a landmark one that has created intense debate among tax authorities and the crypto community.
Should Bitcoin be officially reclassified as a currency, then it could potentially eliminate capital gains tax on any BTC transactions. This would also result in the federal government owning almost AUS $1 billion ($640 million USD) in past tax collections.
Though no ruling has been made as of yet—which means that Bitcoin is still subject to capital gains tax—it is one of the most interesting pending decisions in the country. The decision continues to receive attention, but the ATO has not updated guidance regarding digital asset taxation. Until a higher court confirms that Bitcoin is indeed a currency, nothing is likely to change in that regard.
Staying the Course
Though it is potentially exciting news, nothing new has taken place yet. Investors would be wise to continue with their current compliance plan, follow existing guidelines, and consult crypto tax experts where they see it necessary.
The ruling by O’Connell may have set the ball rolling in the right direction, but there is much change to come in the world of crypto taxation. Australia has been undergoing major changes on that front, and the future is still in motion.
Australians are not only pushing for investor-friendly crypto tax reform in the coming months and years but also seeking to improve clarity and provide simplicity. Many crypto holders in Australia are simply unsure about what their potential tax obligations are as they relate to their crypto and digital asset holdings.
Advocation for a more straightforward, understandable, and cohesive tax policy would go a long way. If the decision by O’Connell is upheld and Bitcoin is considered a currency rather than an asset, it would have major implications on the marketplace as well. Though 2025 remains a period of transition and growth for crypto, it could be some time before we see real change.
