If you’ve engaged in any sort of cryptocurrency transaction over the last year, it’s highly likely that you’re going to have to report it in your tax return. Transactions include, but are not limited to, buying, selling, trading, mining, staking, giving and/or receiving cryptocurrency, and this applies whether the transaction happened in Australia, America or some nameless tax haven in the middle of the Pacific. Basically, if you used crypto, the Australian Tax Office (ATO) wants to know about it.
But actually working out your cryptocurrency tax can be difficult and there are a lot of different facets you need to consider when preparing your tax return. Yet with the ATO keeping Australian crypto investors squarely in their spotlight, it’s more important than ever that you know what you’re doing and how to report your tax obligations correctly.
To help you on your way, we’ve compiled a comprehensive guide to the current rules surrounding cryptocurrency and tax in Australia. While this guide is based on the latest information from the ATO (as of 7 July 2020), the information in this article is for general information only. We are not a financial or legal adviser and the information you’ll find below shouldn’t be considered as financial or legal advice. If you need more specific guidance, you should consider seeking independent financial or legal advice.
Am I an investor or a trader?
First thing you need to do is work out whether you’re classified by the ATO as an investor or a trader.
An investor is someone who is primarily buying and selling cryptocurrencies as a personal investment tool. In this case, your income will be derived primarily from long-term capital gains, as well as staking, forks and airdrops.
The vast majority of people who engage with cryptocurrencies will be considered investors and their cryptocurrency transactions will be subject to Capital Gains Tax (CGT).
A trader is someone who is conducting a business with the primary purpose of earning income from the buying and selling of cryptocurrency. Rather than assessing each transaction as a capital gains event, traders treat their profits as business income instead.
Becoming a trader isn’t simply a question of trading frequency or volume: it requires actions on your behalf that suggest you, either explicitly or implicitly, see your trading as a business, as well as an assessment from the ATO to the same effect. You can find more information about the requirements and consequences of becoming a cryptocurrency trader here.
Capital Gains Tax (CGT)
The ATO classifies digital currency as an asset, much like a share in a company or a house, which means that you need to assess your capital gains every time you sell, trade or give away your crypto. We go into all the different types of capital gains events in more detail below.
Note that a capital gains event only occurs when you actually do something with your crypto. If you simply buy and HODL, then you don’t need to pay tax on your cryptocurrency, even if the value of your portfolio increases (or decreases) significantly.
If you make a profit on a transaction, then you’ll need to pay tax on your capital gain. For instance, if you buy 1 bitcoin at $7,000 (this is what’s known as your “cost basis”) and sell it six months later for $10,000 then you’ve made a capital gain of $3,000 and will need to pay tax on that amount.
Long-term CGT Discount
The Australian Government would prefer it if we weren’t all day-trading on the share/crypto markets and so have implemented what’s known as the long-term CGT discount. Basically what this means is that if you hold an asset for longer than 12 months then you only have to pay tax on 50% of any capital gains you make from that asset.
Returning to the example above, if you bought 1 bitcoin at $7,000 and sold it a year-and-a-half later for $10,000, then your capital gain will only be considered $1,500 rather than $3,000. This, it probably goes without saying, can make a big difference to your tax bill.
If, on the other hand, your cryptocurrency is worth less when you sell it than when you purchased it, you’ve made a capital loss. So, if you buy 1 bitcoin at $7,000 and then sell it six months later for $4,000, you’ve taken a capital loss of $3,000.
Capital losses can be used to offset capital gains either in the same financial year or in subsequent financial years. Let’s say you made a $5,000 capital gain on one trade and a $3,000 capital loss on another. In this case your overall capital gain is $2,000, because your loss partially offsets the gain.
There’s no time limit to how long you can carry forward capital losses, but they must be used if you make a capital gain in a subsequent year. Capital losses cannot be used to offset your income from work.
Calculating your net capital gains
When it comes to calculating your net capital gains, the ATO doesn’t differentiate between different types of asset, so the profits you make from selling crypto, shares, property or any other asset are all bundled in together.
The formula is simple:
Total Capital Gains (incl. CGT discount)
Total Capital Losses (incl. previous years)
Net Capital Gains
When you’ve worked out your net capital gains for the year, that amount is added to your pre-tax salary to work out your overall taxable income.
Net Capital Gains Example
Sarah invests $5000 in Ethereum at a price of $150 and $5000 in Basic Attention Token (BAT) at 25 cents. Three months later she sells half her Ethereum when the price reaches $200 and receives $3,333. Her capital gain on the transaction is:
$3333 – $2500 = $833
When the market tanks six months later, Sarah sells the rest of her Ethereum at $120 for $2000. At the same time she also sells half of her BAT for 18 cents, receiving $1800.
$2000 – $2500 = -$500
$1800 – $2500 = -$700
This means that at the end of the financial year, Sarah has an $833 capital gain and a $1,200 capital loss.
$833 – $1200 = -$367
Sarah has made a net capital loss of $367 and won’t have to pay any capital gains tax. However, the following year the market soars and Sarah’s BAT are suddenly worth 75 cents each. She decides to sell the rest of her holdings for $7500.
$7500 – $2500 = $5000
As Sarah has held these BAT for longer than 12 months she’s eligible for the 50% long-term CGT discount. This means her actual capital gain from the transaction is only $2500. When she calculates her net capital gain for the year, she also claims her loss from the previous year.
$2500 – $367 = $2133
Thus Sarah’s net capital gain is $2133. This amount is added to her pre-tax income for the financial year.
Capital Gains Exceptions
If you’re holding less than $10,000 in cryptocurrency and use it primarily to purchase goods or services, then it’s considered a personal use asset and won’t be subject to CGT.
Personal use is assessed on a transaction-by-transaction basis and won’t apply if: you otherwise hold the cryptocurrency in question as an investment; you’ve held the cryptocurrency for an extended period; or you acquired the cryptocurrency as part of a business.
However, personal use may apply if you obtained cryptocurrency with the intention of using it as money, but then have to convert it to fiat currency in order to make a purchase.
You can find more details and examples on the ATO’s website.
If you donate your cryptocurrency to a registered charity, then it’s not considered a capital gains event and you can claim the amount (calculated as a fair price for the cryptocurrency at the time it’s donated) as a deduction on your tax return.
If you’ve lost access to your coins – for example, by losing your private key – or they’ve been stolen somehow, you may be able to claim the value of the coins on the day they were lost or stolen as a capital loss. In order to do so you’ll need to provide detailed evidence proving that you owned the coins, including identity-linked transactions to and from the wallet in question and other proof of use and ownership.
Ask yourself: would this pass muster with an insurance company? If the answer is no, then it’s likely that the ATO won’t be impressed either.
What’s my tax rate?
If you’re a cryptocurrency investor, your tax rate will be determined by where your overall assessable income sits on Australia’s sliding scale of individual tax rates. Assessable income is calculated by:
Income + Capital Gains – Deductions = Assessable Income
If you’re a crypto trader then your tax rate is calculated on the same scale, but the formula is slightly different:
Income +/- Tradings Gains/Losses – Deductions = Assessable Income
If you’re engaged in a non-sole trader cryptocurrency-related business (i.e. you’ve formally registered as a company with ASIC), then your tax rate will be the same as for other companies: 27.5% on all business related income, after deductions.
An investor’s guide to crypto transactions
Buying cryptocurrency with regular currency (i.e. Australian dollars) is not a capital gains event and doesn’t have to be reported on your tax return.
Every time you sell, trade or convert a cryptocurrency – whether you’re going from one crypto to another, or you’re selling your crypto for fiat currency – you trigger a capital gains event. The capital gain or loss is determined by working out the value in Australian dollars of the new cryptocurrency and comparing that to the value of the old cryptocurrency when you first acquired it.
Dom buys 1 bitcoin for $12,000. Six months later, he uses that bitcoin to purchase 40 ETH when their value in Australian dollars is $500 each. This means the effective value of his bitcoin at the time of trade is $20,000.
$20,000 – $12,000 = $8,000
Dom’s capital gain for the trade is $8,000 and this amount will be added to his net capital gains for the year.
Note that the long-term CGT discount does apply to crypto-to-crypto trades. However, by the same token, the 12 month holding period is reset every time you sell, trade or convert your cryptocurrency.
Understandably this can all get pretty complicated pretty quickly, which is why we suggest using a crypto accounting software like CoinTracker, CryptoTaxCalculator, Koinly or CryptoTrader.Tax to keep accurate records and do these calculations for you.
The ATO treats stablecoins like USDC exactly the same as every other cryptocurrency, so converting your bitcoin to USDC and vice-versa will be considered a capital gains event and any gain or loss will need to be added to your net capital gains.
Giving your cryptocurrency to someone else as a gift is a capital gains event. Giving a gift is treated the same as selling your cryptocurrency at market rates and you have to include any capital gain or loss in your end of year calculations.
If you’re the gift recipient, you only have to pay capital gains when you dispose of the gifted cryptocurrency. In this case, use the market value of the gift on the day you received it when calculating any capital gain or loss.
Hard forks occur when a blockchain transitions from one protocol to another. Usually this happens without any effect on the currency itself, but in certain cases it will lead to the creation of two parallel chains with two separate currencies. For instance, when Bitcoin Cash (BCH) was split from bitcoin itself in August 2017 it gave every holder of bitcoin at the time of the split an equivalent number of BCH.
In cases like this, the ATO deems the new coins to have a cash basis of zero. This means that if you sell your forked coins, your capital gain will be the total amount you sold them for.
For example, if you held 1 bitcoin at the time of the BCH fork, you would have automatically received 1 BCH. If you sold that BCH for $300, then your capital gain for the transaction would be $300.
Airdrops are the normally free distribution of coins or tokens sent directly to your wallet. Airdrops are typically used by ICO issuers to increase awareness of a project, or by established projects to reward holders or increase token supply. Airdrops are unique in that they can occur without your knowledge or consent – but they still have tax implications.
Airdrops have two separate tax impacts. First, the monetary value of the airdropped coins or tokens is treated as assessable income at the time of the airdrop. So, if you’re sent $200 worth of Tron tokens in an airdrop, you need to report that as taxable income.
Second, if you sell, trade or convert your airdropped tokens, it’s treated as a normal capital gains event, with the cost basis being the value of the tokens when you first received them. This means that if you later sell those Tron tokens for $300, you need to report a capital gain of $100
An increasingly large number of cryptocurrencies offer holders what’s known as staking rewards. These rewards are a result of their Proof-of-Stake ‘consensus mechanism’ in which holders of these cryptocurrencies validate transactions and create new blocks by staking their cryptocurrency. If your holding is chosen to validate a block, you receive a staking reward in the form of new tokens.
The tax rules for staking rewards are the same as for airdrops. You need to report both the value of the coins at the time they’re awarded (as straight income), as well as any capital gain or loss made when they’re later sold, traded or converted.
(The same rules also apply to less common, but similar reward mechanisms i.e. Proof-of-Authority or Proof-of-Credit mechanisms by validators, agent nodes, guardian nodes, premium and proxy stakers, etc.)
Cryptocurrency loans are an increasingly popular way for people to earn passive income on their crypto holdings. Any coins or tokens received as a result of your loan will be treated as new assets with a cost basis of zero. This means that they’re not considered income, but if you sell or trade them, you’ll incur a capital gain equal to the total amount received (in Australian dollars).
Let’s say you place 5,000 USD Coin (USDC) in a loan program with an annual return of 8%. At the end of 12 months, you’ll receive 400 USDC. If you then sell those 400 USDC for the equivalent of $600, you’ve made a capital gain of $600.
Using crypto as loan collateral
The borrowing of fiat currency against crypto is not currently seen to be taxable income by the ATO. However, if your collateral is liquified by the loan platform after falling below a certain value, then that will be considered a capital gains event and will be taxed accordingly.
If you’re mining coins as a hobby (as opposed to a business), then the rules are similar to income derived from loans: any coins you receive as a result of your mining will be considered a new asset with a cost basis of zero. This means that if you sell or trade them, you’ll incur a capital gain equal to the total amount received (in Australian dollars).
Initial Coin Offerings (ICOs) and Initial Exchange Offerings (IEOs) allow individuals to purchase tokens or coins for a cryptocurrency that doesn’t exist yet, by depositing an existing cryptocurrency like bitcoin or Ethereum.
In the eyes of the ATO this amounts to a crypto-to-crypto transaction, with the taxable event occurring on the date that the new tokens/coins are received. When you sell the new tokens, the cost basis for the transaction will be the value of the cryptocurrency that you initially paid for it.
Let’s say you buy $3000 worth of Ethereum. Six months later, you use that Ethereum, now worth $4000, to take part in an ICO for a new project called Hammercoin (HMC). Nine months after that, Hammercoin finally launches and you receive 1 million HMC tokens, at a value of 0.4 cents each. Your capital gain on the transaction is $1000 – even if the price of Ethereum has changed between the time of your initial deposit and now. However because the taxable event occurs on the date that the coins are received, you can still claim the 50% long-term CGT bonus. Thus your capital gain on the transaction is $500.
A few months later you sell your HMC tokens for $2500, incurring a $1500 loss and resulting in an overall capital loss of $1000.
Moving crypto between wallets
Moving crypto between wallets you own – either privately or as an account holder on an exchange – is not a capital gains event. However, it’s important to keep track of these movements because automated crypto tax software like CoinTracker, CryptoTaxCalculator, Koinly or CryptoTrader.Tax needs a full record of your cryptocurrency’s transfer history in order to produce an accurate tax report.
Say, for example, that you sent one bitcoin from your CoinJar wallet to a private wallet and then on to a trading wallet on Binance. If CoinTracker, CryptoTaxCalculator, Koinly or CryptoTrader.Tax can’t account for the transfer to your private wallet, it will assess the passage both too and from the wallet as a taxable event, potentially resulting in a much larger tax bill.
How does tax work for cryptocurrency traders and businesses?
As mentioned above, the vast majority of people who engage with cryptocurrency will be seen as investors by the ATO. However, if you are running an explicitly crypto-oriented business, such as a mining farm, or are operating as a trader rather than an investor, then the rules are different.
Am I a trader?
This question is harder to answer than it might first appear. Simple quantity of trades is not enough to render you a trader in the eyes of the ATO – you must also be operating in a “business-like manner”. While there’s no absolute definition of what constitutes business-like activity, some of the things to look for are:
- Significant capital investment.
- A focus on short-term profit generation, as opposed to long-term investment.
- High volume, repetitive and regular transactions which take place on a daily or weekly basis.
- Buying and selling behaviour that suggests an active trading strategy.
- Actually operating in a business-like manner i.e. business registration, strategy documents, office space, business planning, budgeting, consistent asset selection and business-like record keeping.
If you satisfy most or all of the above, then it’s likely that you’re operating as a cryptocurrency trader. If you’re uncertain whether you’re acting as a trader or not, we strongly suggest you secure the services of a crypto tax specialist to help work it out.
Can I be both a trader and an investor?
The short answer: yes. However, if you do want to hold both trading and investing accounts, it’s important to ensure that they exist in separate wallets and experience a minimum of cross-contamination i.e. don’t keep sending coins back and forth between them.
This also means it’s possible to be a cryptocurrency trader and a stock market investor and vice versa.
What does it mean to be a cryptocurrency trader?
Basically, if you’re operating as a cryptocurrency trader it means that you’ll be taxed as a sole trader. Rather than assessing each trade as a capital gains event, sells are seen as trading income, while buys are considered trade purchases. So, much like a regular business, it’s all about income and expenses.
At the end of the year, you’ll tally your income and your expenses – including the difference between the value of your portfolio at the beginning and end of the year – and the profits will be added to your overall taxable income. However, if you make a loss you may be able to deduct that from your other income for the year.
Note that if you’re running an official crypto business – that is, you’ve registered yourself as a company with ASIC for the purposes of trading, mining or any other crypto-related activity – then you’ll pay the Australian company tax rate of 27.5% instead. However, that rate only applies to profits the company has made. Any money you pay out as wages to either yourself or your employees will be deducted from the company’s profits and taxed as personal income instead.
Benefits of being a cryptocurrency trader
Being a cryptocurrency trader gives you access to many of the tax benefits available to small businesses. These include:
- Small business tax incentives: these change year to year, but typically offer $1,000 tax offsets and reduced rates to certain classes of small business.
- Loss rules: crypto traders who generate over $20,000 in trades but record an overall loss can often claim this against the rest of their taxable income, allowing traders to claim their trading losses against their regular salary.
- Expenses: all business- and crypto-related expenses, such as hardware, software, trading fees and subscriptions can be claimed as deductions. Traders can also access the $30,000 small business instant asset write off.
Negatives to being a cryptocurrency trader
- Increased likelihood of ATO scrutiny: given the many tax concessions on offer to crypto traders, the ATO is likely to take a keen interest in your activities.
- Extra admin: As a trader, you’re subject to more complex record-keeping and compliance requirements, which can cost both time and money. This can include: detailed trading records; a log of work time; clearly defined strategy documents; detailed research notes; and accurate business records.
- No long-term capital gains discount: That 50% can really make a difference.
Do I have to register for an ABN/GST?
If you’re classified as a trader then you’ll have to register for a sole trader ABN if you haven’t already, but you only need to register for GST if your annual GST turnover (income before expenses) is over $75k. Cryptocurrency trades are considered to be input-tax sales, which are sales of goods and services that don’t include GST. You can’t claim GST credits for your ‘inputs’ and your cryptocurrency trading turnover doesn’t contribute towards your annual GST turnover.
While you can’t claim GST on your trading per se, you may be able to claim certain business purchases – what are known as reduced credit acquisitions – as well as 75% of any GST paid on brokerage fees. GST compliance can get pretty complex so unless your GST turnover is above $75k per year (in which case you don’t have a choice in the matter), you’ll have to decide whether it’s worth the extra administrative hassle.
Cryptocurrency mining as a business
If you’ve been earning income from mining crypto, then you’ll first have to work out whether you’re running a business or simply mining as a hobby. Much like with trading itself, there are no hard and fast rules here, but generally if you’re conducting business-like activity – i.e. registering a company, creating business plans, pursuing an active profit model, conducting the same activity in a regular, planned fashion – then the ATO is likely to see it as a business.
For mining, this means that all mined cryptocurrency must be reported as income in Australian dollars at the time that it’s mined. Any income you make from selling or trading the crypto must also be reported. At the end of the year, any stock you have on hand will be measured against the stock you had at the beginning of the year and added to the total.
As a business you’re able to claim expenses such as hardware depreciation, software and electricity costs. You may also be able to claim the small business instant asset write-off, which allows you to claim up to $30,000 of equipment or infrastructure costs as a deduction. Finally, you may be able to claim any losses against your regular income, subject to the rules for non-commercial losses.
Loans, interest, staking and other forms of cryptocurrency-related business income
As a basic rule, if you’re receiving, sending, buying, selling or giving away cryptocurrency as part of your business – basically any income or expense rendered in cryptocurrency – then you’ll need to include the proceeds as part of your ordinary income. This means reporting the Australian dollar equivalent of the transaction at the time that it occurs.
However, it’s likely that the business-like nature of each activity will be assessed separately. So, you might be running a crypto mining business, but taking interest on crypto loans as a hobbyist or investor.
Futures, options, CFDs and other derivatives
As a trader, any income you make from systematically trading futures, options or other derivative instruments are treated the same as regular trading – your net gain or loss for the year will be added or deducted from your overall income.
However, if you’re trading derivatives as a hobbyist or gambler, the rules are different. In these cases, your gains might be untaxed, but your losses – which the ATO assumes will be the case, because you’re, well, gambling – can’t be claimed as a deduction.
If this sounds like a loophole, prepare to be disappointed. There’s another class of derivative trader: the speculator. Speculators are the derivative’s version of a straight-up investor. They occasionally trade derivatives with a view to making a profit – i.e. there’s a strategy to their decisions – and their profits or losses will most likely be treated as capital gains or losses.
As with crypto trading more broadly, whether you’re a trader, a speculator or a hobbyist hinges on both intention and practice. This means answering questions like: how business-like are you in your activities? How frequently are you trading? How much capital do you have trade with? How much strategy goes into your decisions?
Like the instruments themselves, derivatives tax is complex (and risky) and there are subtle differences in the treatment of different derivatives, so we suggest you talk to a tax professional both before and after making them part of your trading strategy.
Paying employees in cryptocurrency
Generally paying employees in cryptocurrency is treated the same as normal salary or wages. This means that you need to meet all the regular PAYG and superannuation obligations for the employee based on the Australian dollar value of the crypto you’re paying them.
However, if you have a salary sacrifice agreement in place with the employee, then the crypto payment could be classified as a fringe benefit and you need to take note of the rules surrounding the Fringe Benefits Tax.
Reporting Your Tax
The Australian tax year runs from July 1 to June 30. When you lodge your tax return, you need to include all the crypto transactions that occurred between these two dates.
If you are lodging your own return, it must be completed by October 31 of the same year. If you are lodging through a registered tax agent/accountant you usually have until March 31 of the following year to submit your returns.
It’s important to meet these deadlines, because delays in filing your taxes can lead to penalties, fees and potentially even extra scrutiny from the ATO.
What records do I need to keep?
Whether you’re an investor or trader, it’s vitally important that you keep clear, comprehensive records of all your cryptocurrency transactions. A proper record includes:
- The date of each transaction
- The value of the cryptocurrency in Australian dollars at the time of the transaction
- The purpose of the transaction (i.e. was it a gift, a donation or for personal use?)
- The details of the other party involved (even if it’s just their crypto wallet address)
You should also keep evidence of the following:
- Receipts of cryptocurrency purchases or transfers
- Exchange records
- Invoices for any agent, accountant or legal costs
- Digital wallet records and keys
- Any software costs associated with the management of your tax affairs
How can I manage all these transaction records?
If you trade with any regularity, keeping these records can quickly become challenging. While most reputable exchanges now offer users the ability to download comprehensive transaction records, compiling them into a single, ATO-friendly document can still present challenges, especially if you’re operating across a number of wallets and cryptocurrencies.
We suggest using a crypto accounting software like CoinTracker, CryptoTaxCalculator, Koinly or CryptoTrader.Tax. These programs allow you to keep track of all your transactions in real-time, irrespective of where and when they take place. At the end of the financial year they’ll compile your transaction history into a single document that sets out your capital gains and losses in Australian dollars, allowing you to quickly and easily assess your tax obligations while also monitoring your overall portfolio performance.
Automate your tax return through CoinTracker, CryptoTaxCalculator, Koinly & CryptoTrader.Tax integrations
CoinJar now offers full, secure transaction integration with both CoinTracker, CryptoTaxCalculator, Koinly and CryptoTrader.Tax. This means that whenever you buy, sell or trade a cryptocurrency on CoinJar, the transaction will be ported directly to your CoinTracker or CryptoTaxCalculator account, ready for the end of the financial year.
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CryptoTaxCalculator is made in Australia and offers an annual plan which covers all previous financial years from 2013-2020. So if you need to amend your tax return for previous tax years the plan has you covered all under the one pricing. They offer a 30 day money back guarantee and you can cancel your subscription anytime.
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Tips for minimising your crypto tax
While we’re firm believers in full tax compliance – both because it’s the right thing to do and because the ATO is currently sending warning letters to 350,000 cryptocurrency users – there are still things you can do to ensure you’re not overpaying. These include:
- Be a HODLer: keep hold of your crypto for more than 12 months and you can take advantage of the 50% long-term CGT discount.
- Make your intentions clear: is the crypto you’re buying intended as an investment or are you keeping it for trading or personal use? Keeping different wallets for different purposes can help prove your intention to the ATO.
- Track your transactions: the longer you wait to account for your crypto transactions the messier it’s going to be. Start using crypto accounting software like CoinTracker, CryptoTaxCalculator or Koinly to ensure you’re ready to go the moment tax season rolls around.
- Deduct away: if you’re a trader or are running a crypto business, you could be eligible to claim significant deductions on your regular income.
- Disclose everything: people think that because bitcoin is anonymous their transactions can’t be tracked, but in fact the opposite is true – on the blockchain everything can be tracked. Reddit is filling up with stories of people getting letters from the ATO for trading tiny amounts of bitcoin years ago, so never assume that your transactions are untraceable. If the ATO feels you’ve been deliberately hiding your crypto trading, you could be liable for severe fees and penalties.
Talk to an expert: crypto taxation is confusing and rapidly changing territory. If you’re uncertain where you stand or what your obligations might be, then talk to an expert.
Cardano Multi-Asset ‘Mary’ Update Launches to Mainnet
Late on Monday, March 1, Cardano announced the successful upgrade of the network stating that it is a key milestone in its ongoing rollout.
It added that the update introduces core Goguen features of native token functionality and multi-asset support. Goguen is a major upgrade stage on the Cardano roadmap which introduces smart contracts and the ability to build dApps.
— Input Output (@InputOutputHK) March 1, 2021
Multi-Asset Mary For Native Tokens
According to an IOHK blog post, native tokens will bring multi-asset support to Cardano, allowing users to create uniquely defined custom tokens and carry out transactions with them directly on the blockchain.
The ‘Mary’ upgrade enables the ledger’s accounting infrastructure to process not only ADA transactions but those that simultaneously carry several asset types. It added that native support grants distinct advantages for developers as there is no need to create smart contracts to handle custom token creation or transactions.
Developers and now create tokens on Cardano for everything from NFTs to tokenized stocks or commodities, and according to Token Tool, there are already over 1,400 of them. It appears that they are just being created for experimental purposes at the moment as most of them do not have a purpose.
The blog post explained that, unlike Ethereum’s ERC-20 standard, tracking and accounting of custom tokens on Cardano is supported by the ledger natively:
“Because native tokens do not require smart contracts to transfer their value, users will be able to send, receive, and burn their tokens without paying the transaction fees required for a smart contract or adding event-handling logic to track transactions.”
ADA Price Update
ADA has surged in price in the run-up to the upgrade, so much so that it has usurped Binance Coin and taken the third spot on the market cap charts according to CoinGecko.
At the time of press, ADA was still correcting with a 2.4% decline on the day to $1.22. Its all-time high came on Feb. 27 when the token topped $1.45 briefly. Over the past 30 days, Cardano has made a whopping 240% and since the same time last year when it was priced at a lowly $0.05, it has surged over 2,500%.
There are 32 billion tokens circulating out of a maximum supply of 45 billion giving the asset a market cap of $38.8 billion at current prices.
Miami Mayor dismisses Treasury Secretary Yellen’s criticism of Bitcoin
Over the past few weeks and months, Miami and Mayor Francis Suarez have been working towards positioning the city as the country’s premier crypto-hub. “We want to be one of the most crypto-forward and technological cities in the country,” Suarez had said in a recent interview, with the comments coming on the back of reports which claimed that Miami was considering putting 1% of its treasury reserves into Bitcoin.
In fact, a few weeks ago, the city official had also claimed that Miami was looking at crypto-regulations in the state of Wyoming and Wisconsin, among others, to take a step towards enabling crypto-payments.
Mayor Suarez is in the news again today after he responded to Treasury Secretary Janet Yellen’s comments on Bitcoin, the world’s largest cryptocurrency. Speaking to the media at the recent NYT DealBook Conference, Yellen claimed that Bitcoin is an “extremely inefficient way of conducting transactions.” Further, the Treasury Secretary also raised serious questions about Bitcoin’s use for illicit finance and its energy consumption.
Yellen’s remarks, however, didn’t come as a surprise to Miami’s Mayor.
“It doesn’t surprise me at all that a Treasury secretary would find a decentralized potential currency to be hostile to a currency that they control.”
According to Suarez,
“For people who invest in Bitcoin, the allure is precisely that: It’s not backed by a central government. So it’s not manipulatable by the central government.”
During the said interview, Suarez also shot down questions about the risk associated with the world’s largest cryptocurrency. When asked about investing in an asset class that has long been known for its volatility, the Mayor remarked that Bitcoin is an asset class that is still being studied, and not something Miami is jumping right into. “Bitcoin is worth studying and worth looking at,” he concluded.
While Mayor Suarez’s bullish comments on Bitcoin aren’t a surprise, it is worth highlighting that his latest comments were a direct response to statements made by the United States’ Treasury Secretary, a development that highlights the gulf that is appearing between local officials and the country’s biggest financial decision-makers.
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Nigeria’s Vice President makes a surprising case for Cryptocurrencies
A contradictory statement has recently been made by Nigeria’s Vice president Prof. Yemi Osinbajo, concerning the recently imposed Cryptocurrency ban by the country’s Central bank. The Vice President explained at the CBN bankers committee economic summit, that digital currencies are an inevitable part of the country’s economy.
Prof. Osibanjo makes a fair case for digital currencies
He reckoned that as opposed to banning Cryptocurrencies entirely, employing care and prudence could favor the technological developments that are byproducts of the emergence of digital currencies.
“We must act with knowledge and not with fear, we must ensure that we are in a position to benefit and in a position to prevent any of the adverse side effects or any of the criminal acts that may arise as a consequence of adopting or taking any of these options.” He explained.
Taking to Twitter to share the aforementioned keynote speech at the summit, he went on to emphasize the impending innovative shift that the country would make when digital currencies dominate the financial market.
As he puts it :
“Cryptocurrencies in the coming years will challenge traditional banking, including reserve banking, in ways that we cannot yet imagine, so we need to be prepared for that seismic shift.”
Nigerians respond to the government’s “theatrics”
The Crypto-community in Nigeria has responded to the Vice President’s speech in sarcastic unison, as they await a turnaround of events to carry out the job of clearing their doubts. Similar theories have sprung up, following the country’s Cryptocurrency ban, in which banks were prohibited from partnering with Cryptocurrency firms to process payments.
Many have suggested that the government’s decision to ban Cryptocurrency is birthed out of the fear of the decentralized nature of digital currencies, which were efficient for the ‘EndSars’ protesters to bypass bank restrictions and continue with their march against police brutality.
Nigerians cling to P2p trading to help combat government policies
It remains to be seen what the future holds for the country, whose younger citizens have helped to boost and profit from the booming industry of Cryptocurrency investment and trading, among other Crypto-related activities from their end.
In the meantime, for Cryptocurrency trading platforms like Buycoins, the show must go on. Users of the platform have since returned to their roots as the platform employs a third-party app to facilitate peer-to-peer trading.
Even though this could potentially affect the speed at which transaction is processed, Nigerians have reaffirmed that sticking to the available option is still less risky than storing their money in a traditional bank.
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