Reports have started to come in from the Australian Tax Office that any and all retirement funds that have more than 90% of their portfolio in Bitcoin will be recognized and illegal and therefore not supported by the insurance of inflation rates and all the other benefits that the government entities may offer.
This announcement is derived from the Australian diversification law that supports retirement funds as long as they contain a diversified portfolio. A diversified portfolio in the eyes of the Australian Tax Agency is a set of assets that don’t dominate a portfolio. For example, if one had $1000 in their portfolio and $901 of it was in stocks, it would immediately be branded as illegal.
However, the crypto community in Australia, and especially those who liked to use their digital assets for gambling purposes have criticized the ATO’s announcement that it will classify these accounts as illegal.
Most of the outrage came from calling cryptos financial assets which had not been done on a country-level before. The reason could be the overwhelming majority of Aussie gamblers using cryptos now to somehow avoid the watchful eye of the ATO as well as the banks that monitor a citizen’s spent money on gambling to determine their credit score.
If we take a look at the Australian Bitcoin casino here, we can see that a large majority of the games do indeed support Bitcoin gambling, which is basically gambling squared for the government.
Why could the government be doing this
One of the easiest explanations is that the government simply wants to remove the bad habits of its population of wasting money on services that don’t bring any value. The government would much rather have these people spend their money on consumer goods and support various local companies, rather than support casinos that in most cases don’t even belong to Australians.
Furthermore, it could be an indication that a revamped crypto regulation is on its way to the Australian jurisdiction. Nearly every regulator is starting to consider FATF guidelines and model their regulations around it. Those who’ve already drafted one would have to rewrite the regulation completely.
However, local experts believe that the first reason has much more merit in the grand scheme of things, simply because there is anxiety about an upcoming global recession. Having casino companies be the most well-performing entities in the country would not classify Australia as a country that is prepared for such an endeavor. However, diversifying this extra income to consume goods and various other services would give it the economic backbone it needs to survive the tides.
Overall though, it’s likely that the Australian Tax Office will not back down from this statement.