What does the ATO consider to be Digital Currency?

applicable Regions:

Australian Capital Territory

New South Wales

Northern Territory

Queensland

South Australia

Tasmania

Victoria

Western Australia

Digital currency is a digital unit of value that has all of the following characteristics:

✅ Fully interchangeable with another unit of the same Digital Currency for the purpose of its use as payment;

✅ Can be provided as payment for any types of purchases;

✅ Generally available to the public free of any substantial restrictions

✅ Not denominated in any country's currency;

✅ The value is not derived from or dependent on anything else

✅ Does not give an entitlement or privileges to receive something else.

Some examples of Digital Currencies include:

Bitcoin, Ethereum, Litecoin, Dash, Monero, ZCash, Ripple, YbCoin.

Things that are not Digital Currency for GST purposes include:

❌ Loyalty points provided by retailers that can only be redeemed for products and services specified by that loyalty scheme;

❌ 'Currency' used in online multiplayer games, that cannot be used outside the game under which the 'currency' is made available;

❌ 'Digital Currency' with value based on something else or that gives an entitlement or privileges to something else.

For example: A token that is aligned with an Australian or foreign currency, or gives you an entitlement to use software application services.

Source: ATO Website - GST and digital currency