Population: 25 million

Wealth in domestic bank deposits: 2,615 billion USD (March 2023)

Offshore expatriated wealth: 80.9 billion USD

Main offshore banking locations: N/A

Number of individual brokerage accounts: 9.5 million (2021)

Crypto adoption (% of population): 700,000 (2.7%)

TLDR

Australia has a developed financial system and open, business-friendly economy. The Australian dollar is freely traded, with minimal foreign exchange controls. Rules differentiate between professional and retail investors. Oversight of the cryptocurrency market aims to harness potential while safeguarding stability. The country recognizes digital assets within a supportive tax and legal regime.

Exchange controls

Australia imposes minimal restrictions on foreign exchange transactions and cross-border capital flows. The Australian dollar is freely convertible, and its exchange rate is market-determined. Transfers above AUD 10,000 must be reported to the Australian Transaction Reports and Analysis Centre (AUSTRAC) to curb money laundering and tax evasion. But otherwise, there are no limits on international payments or repatriation of capital, dividends or profits. Authorized foreign exchange dealers facilitate most forex transactions. The Reserve Bank of Australia rarely intervenes in forex markets, only to smooth volatility.

Distribution rules for foreign investment products

The primary legislation governing securities regulation in Australia is the Corporations Act 2001. It establishes rules for company formation, shares and voting rights, corporate governance, directors’ duties, takeovers, and insolvency. The Australian Securities and Investments Commission (ASIC) is the regulatory authority responsible for enforcing this Act and regulating financial markets, services and professionals. The ASIC issues licenses, monitors compliance, investigates breaches, and can ban activities or individuals and prosecute offenders.

Qualified investors

In Australia, qualified (or sophisticated) investors are individuals or entities considered to have sufficient investing experience and financial means to participate in complex, higher-risk investments. To be deemed a qualified investor, one must satisfy financial thresholds set by the Corporations Act 2001. For individuals, this includes having a gross income exceeding AUD $250,000 in each of the last two fiscal years or net assets above AUD $2.5 million. Companies or trusts controlled by such high net worth individuals also qualify.

Additionally, an individual can attain wholesale investor status through a qualified accountant’s certification vouching for their investing experience. The wholesale classification enables access to private equity, venture capital, angel investments, commercial real estate crowdfunding, and other alternative assets not available to ordinary retail investors. Wholesale investors can also invest over AUD $10,000 in equity crowdfunding offers, while retail participants face a cap at this amount.

Cryptocurrency regulation

The Australian government has taken a progressively open stance toward cryptocurrencies and blockchain technology. In 2017, Australia recognized Bitcoin and other digital currencies as legal and treated them as property within the existing tax code. Crypto can be used for transactions, trading, investments and other purposes within a supportive regulatory environment.

In 2018, cryptocurrency laws were amended to include anti-money laundering (AML) and counterterrorism financing (CTF) rules. While not their own distinct area of law, cryptocurrencies fall under the oversight of the Australian Securities and Investments Commission (ASIC) as part of exchange-traded products and investment instruments. The Australian Taxation Office taxes capital gains on cryptocurrencies when held as investments for over 12 months.

Looking ahead, the Australian government seeks to develop a comprehensive regulatory framework tailored to digital assets and cryptocurrency trading platforms. This aims to address crypto-specific risks regarding volatility, cybersecurity, and illicit usage. Consumer protection and market integrity are top priorities. Key focus areas include defining crypto asset characteristics, filling regulatory gaps, introducing custodial regulations, and regulating exchanges.